Inflation surges to 191,7%
ZIMBABWE’S annual inflation jumped to 191,7% in June from 131,7% recorded last month, further spiking upwards prices of basic goods and services.
The 60% point movement comes on the back of yet another fuel price hike of US$1,88 from US$1,76 for diesel and US$1,77 from US$1,73 for petrol.
The incessant price shifts have left government struggling to shore up the economy and President Emmerson Mnangagwa’s promises to implement new measures to stall the price stampede are yet to materialise.
The latest report by Zimbabwe National Statistics Agency (ZimStat) revealed that the cost of living for a family of six has increased to $110 550 from $14 041 for monthly expenses.
“This represents an increase of 31,2% when compared to the May 2022 figure of $14 041,38,” ZimStat said.
In its own assessment, the Consumer Council of Zimbabwe, however, pegged last month’s consumer basket at $120 000 for a family of five.
Economist Prosper Chitambara said government was driving inflation through financing of its capital expenditure.
“The increase in broad money supply is largely on account of government financing of its capital projects expenditures, especially the financing of agriculture and the financing of some of the infrastructure,” he said.
“It has contributed in the increase of broad money supply within the economy which has stalked up inflationary pressures.
“Government should find sustainable ways of financing agriculture.”
Another economist Christopher Mugaga believes: “The policy on statutory reserves is fuelling inflation or growth in money supply as banks have to interact with their supervisor (Reserve Bank of Zimbabwe) to meet the statutory requirements.
“Money supply is no longer coming from either reserve money or broad money supply sources. It is the slippery statuary reserve requirement as well as contractors who are paid in Zimdollar and rushing to the black marker to procure forex, hence creating an unhealthy artificial demand for US dollar.”
In May this year, renowned United States economist Steve Hanke stated that Zimbabwe’s inflation figures were understated and placed the country’s inflation as the world’s highest at over 300%.
Opposition Citizens Coalition for Change leader Nelson Chamisa and other concerned stakeholders fear that the Zimbabwean economy was on the brink of collapse due to the hyperinflationary environment.
But government, through the Reserve Bank, maintains that the economic environment is still quite stable.-newsday
