Zimbabwe inflation rate races to 98%
By Thabani Zwelibanzi
Barely a week after Finance Minister Mthuli Ncube announced that the prices of basics will start going down next month, the Zimbabwe Statistical Agency (Zimstat) has announced that the year-on-year rate of inflation has raced to 97,85 percent in May up from 75,86 percent the previous month.
The month-on-month rate also jumped from 5,52 percent in April to 12,54 percent in May, stoking fears that Zimbabwe was sliding back to the days of hyperinflation.
Ncube has often touted the month-on-month rate as a sign that inflation was under control, but the latest figures could leave him with egg on the face.
Zimstat explained that the year-on-year food and non-alcoholic beverages inflation, which is prone to transitory shocks stood at a massive 126,43 percent, while the non-food inflation rate was 85,94 percent.
“The month-on-month food and non-alcoholic beverages inflation rate stood at 17,63 percent in May 2019, gaining 9,78 percentage points on the April 2019 rate of 7,85 percent,” the statistical agency said on Monday morning.
“The month on month non-food inflation rate stood at 10,12 percent, gaining 5,67 percentage points on the April 2019 rate of 4,45 percent.”
Zimstat said it collected the inflation data between May 13 and May 17.
And probably to illustrate the rate at which prices are rising in Zimbabwe, Zimstat said had it continued to use an older model that it discarded in February, the rate of inflation for May would have been 197.3 percent.
Zimbabwe faces the twin problems of local and foreign currency shortages deepening an economic crisis that has seen the International Monetary Fund (IMF) projecting that the Southern African country’s economy could shrink by as much as 5,2 percent.
But authorities insist they are embarking on far-reaching reforms that should start bearing fruit soon.
The central bank introduced the Intermarket rate for foreign exchange rate in February, but the local unit has crashed almost 72 percent against the American greenback from RTGS$2,50 to the US dollar on that exchange to RTGS$6 to the dollar.
President Emmerson Mnangagwa has announced that the government will introduce a new currency before the year is out.
However, a few days later, he spoke about devaluing the RTGS dollar to make it competitive.
Ncube had initially said a new currency would be introduced within 12 months, but when he was put on the spot by parliamentarians, he quickly recanted and said he was misquoted.
The contradictory statements are unlikely to help build confidence in the Zimbabwean economy.