Zimbabwe official inflation figures disputed

Zimbabwe official inflation figures disputed
Published: 20 June 2019
RENOWNED United States economist and currency expert Steve Hanke has disputed the latest official inflation figures released by government this week.

Hanke, who had previously volunteered to advice President Emmerson Mnangagwa's government but was turned down by Harare, said official inflation should be at 364 percent.

The Zimbabwe National Statistics agency (Zimstats) — on Monday said official inflation had now reached 97,85 percent — driven by high prices recorded during May.

"Zimbabwe's annual inflation rate is 364 percent, nearly five times the government's reported rate.

"Don't believe a word from the Mnangagwa government. Zimbabwe must install a currency board or formally dollarise if it wants to avoid an unending death spiral," Hanke said on microblogging site, Twitter.

Hanke's inflation calculations are derived from the Old Mutual Implied rate, which compares its share prices in London and Harare, respectively.

On the other hand,  Zimstats uses the Consumer Price Index (CPI) which measures the price movements of all goods and services in a month.

Zimstats on Monday announced that official inflation was nearing 100 percent after it jumped from 75, 86 percent to 97,85 percent — the highest in 10 years since the country ditched its worthless dollar in 2009 when it adopted the multi-currency system.

"The year on year inflation rate for the month of May 2019…stood at 97,85 percent, while that of April 2019… was 75,86 percent.

"This means that prices…increased by an average of 97,85 percent between May 2018 and May 2019," the national statistics agency said.

Zimbabwe is currently in the grip of mega economic crisis which has seen the prices of goods rising sharply due to a rampaging foreign currency black market which has resulted companies accessing their needs at a premium.

The inter-bank market has so far failed to hold back the parallel market due to lack of confidence.
 Apart from high prices of goods, the country is currently experiencing serious power cuts and erratic supplies of fuel despite recent price increases.

So bad is Zimbabwe's current economic crisis — which has heightened calls for political dialogue between President Emmerson Mnangagwa and opposition leader, Nelson Chamisa — that there are fears the economy could plunge to frightening levels of 2008 where hyperinflation decimated lives of ordinary people and businesses.
- dailynews
Tags: INflation,


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