Zimbabwe inflation flies to 2 million per cent

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Zimbabwe’s annual for May galloped to 1 700 000% as the Zimbabwean
dollar continued to crash causing prices of goods and services to skyrocket.

from our correspondent in Harare

A top official in the Ministry of Finance says the Robert Mugabe government has now forecast the figure to reach between 1 800 000% and 2 000 000% for the month of May.

May inflation rose by 961 396 percentage points from the April figure
of 732 604% to 1 694 000%.

The 1 694 000% was for the CSO’s inflation computations for the period
from May 1 to May 23.

Non-alcoholic beverages and cereals continued to be the major drivers.

The official said the Central Statistical Office (CSO) had been
conducting weekly computations of inflation for the entire month of May. “They have computed weekly moving averages on the figure,” the
official said.

“Last week the figure was 1 694 000% and this week we expect it to hit
2 000 000%. We will only know next week when they compile data for this final week of May.”

The annual inflation figure for March stood at 355 000% while that for
February was 165 000% but the CSO insists that even these figures were not official. “As government, our reasonable approximation for June now stands at not less than 4 000 000% and not more than 5 000 000%,” the official said.

The weekly moving inflation figure for the first week of May was 1 200
000% according to the source.

However, CSO acting director Moffat Nyoni disputed the figures saying inflation figures for May had not yet been computed.

Nyoni insisted that the CSO was experiencing problems with the
availability of products which affected the consumer basket used to
calculate inflation.

He also said the CSO was yet to compute inflation figures for April
despite the removal of duty on food imports.

“The number of observations we use have been affected,” Nyoni said. “It has gone down and this affects the strength of our figures which will be very weak. Inflation is nowhere near that figure. We have a time lag and the May data will be available late in June.”

Nyoni however conceded that the figure for March stood at 355 000%
saying it had been leaked. He said the figure was not officially released.

Economists and the business community said they believed inflation for
May would end the month closer to 2 000 000%.

“It is impossible for inflation to end the month at less than 2 000 000%,” said businessman Morgan Chogwe. “Our calculations show that inflation has already surpassed 1 600 000% in recent weeks.”

Economist John Robertson said his estimates for May year-on-year
inflation had been 1 800 000%. “My projections had placed inflation at 1 800 000% for May,” Robertson said. “It seems I was not far off the mark.”

Inflation has continued to rise steeply on the back of increased money
supply, spiralling domestic debt, declining production and scarcities of
foreign currency and food.

The Reserve Bank of Zimbabwe has been accused of injecting huge and
unsustainable amounts of local currency into official circulation causing
inflation to skyrocket.

Several listed companies whose financial years ended between February
29 and March 31 now face suspension if they fail to release
inflation-adjusted results owing to the CSO’s failure to release inflation

There now appears to be no respite for the general public, as prices
of goods continue to rise. Companies have been pushing up their prices in line with the deregulated inter-bank exchange rate.

The Zimbabwean dollar was this week trading at US$1:$620 million, up
from US$1:$480 million last week.

A loaf of bread which was selling for $180 000 earlier this year is
now going for around $280 million in most shops. It is going for between
$400 million and $450 million on the black market. A 2kg packet of sugar
which was pegged at $7 million is now selling for $700 million.

A kilogram of meat which was at $30 million is now selling for between
$1,5 billion and $2,5 billion.

A 750 grammes bar of soap which at the beginning of the year was $2
million now calls for one to fork out $1,8 billion.

In January, a packet of fresh milk was selling at $1,3 million. The same packet now sells for $190 million, while a kilogramme of salt which was selling for less than $2 million is now pegged at $440 million.

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