Friday, March 10 2006 @ 10:18 AM GMT
Contributed by: correspondent
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  Zimbabwe’s year-on-year inflation has raced to a record high of 782 percent- the highest increase ever recorded in the country, according to the Central Statistical Office (CSO). The price of goods and services in Zimbabwe rose by at least 170percent last month. Low-income families were experiencing "difficult times, as shortages of basic commodities continue and price adjustments occur daily", the Consumer Council of Zimbabwe (CCZ) said as the inflation figures were released. Inflation reached 613 percent at the end of January, and last month's record hike drove the annual rate to its current 782 percent.
Economist John Robertson explained that "the increase in prices of goods and services has been driven by the scarcity of foreign exchange". The latest increase makes it mathematically impossible for Zimbabwe to achieve the target of double-digit inflation by the end of 2006, set by Reserve Bank Governor Gideon Gono. Acting CSO director Moffat Nyoni attributed the latest rise partly to the Reserve Bank, which had reset exchange rates. "If the exchange rate had been allowed to fall in line with inflation, monthly [inflation] figures would have been higher over the last year, but last month's figure would have been lower," he said. “Rent, transport, college and tertiary fees contributed the highest to the annual inflation figure," Nyoni said.
According to Robertson, the biggest increases were recorded in school fees, which soared by 1,263.6 percent, and rent, which climbed by 157.3 percent. The annual inflation rate for food and non-alcoholic beverages was 226 percent, while for non-food items it was 273.9 percent. From Z$21million in January, the expenditure basket for a family of six had shot up by at least Z$7million to $28million in March, the consumer council noted. "The increase was largely propelled by ... both food and non-food items, following last month's increase in bread prices and the devaluation of the local currency".
Teachers generally earn Z$9 million a month, while domestic workers get an average monthly wage of Z$2 million. The CCZ said the price rises could also be partly attributed to the "prevalence of the black market, which gives ready access to commodities such as sugar, cooking oil, mealie-meal, flour, soap and fuel, which have disappeared off the formal market." The economic difficulties are further amplified due to unemployment reaching over 70 per cent. Large numbers of people are reported to be leaving the country to find jobs and income in nearby states.
For most of its 26 years of independence, Zimbabwe was seen as a prosperous country in southern Africa. Today the United Nations predicts that more than five million Zimbabweans, about a third of the population, will need food aid this year. And foreign aid has dried up due President Mugabe’s skewed economic policies. Just this week the International Monetary Fund refused to extend technical assistance to Zimbabwe over long overdue obligations to the world lender. |
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