Zimbabwe inflation jumps to 191.6%

Zimbabwe inflation jumps to 191.6%

Zimbabwe annual inflation rate quickened to 191.6 percent in June, more than doubling the consumer price increases of two months ago, official statistics showed Saturday.

Month-on-month inflation rose by 9.7 percentage points to 30.7%.

United States economist Steve Hanke put Zimbabwe’s inflation at 377% as at 23 June.

Zimbabwe has been battling to control inflation as its local currency continues to plunge against the United States dollar.

The government blames speculators and currency manipulators and several measures that the government has announced to curb inflation have so far failed.

The development came as the government failed to present new measures to tackle the rising cost of living which President Emmerson Mnangagwa had said would announced Saturday.

Inflation which was at 96.4 percent in April, crept up to nearly 200 percent as prices of cooking oil and bread are leaping higher as a result of Russia’s invasion of Ukraine.

The price of basic goods including bread has soared, prompting the central bank last week to offer bakers access to foreign currency in order to curb increases. The energy regulator on Friday announced a second increase in a month in gas prices.

The Zimbabwean dollar has weakened 70% this year against the US dollar, making it Africa’s worst performing currency. The local unit officially trades at Z$355 per US dollar, but changes hands for between Z$500 and Z$670 on the parallel market, according to ZimPriceCheck.com, a website that tracks both the official and unofficial rates.

Thousands of nurses and doctors at state-run hospitals were on strike since Monday demanding a hefty raise and wages in US dollars due to the slide in the local currency and the erosion of the value of their earnings due to inflation.

They went on strike on Monday after rejecting a government offer to double their local currency wages, saying the 100% hike would not even compensate for annual inflation that jumped to 131.7% in May.

President Emmerson Mnangagwa was forced to promise new measures to bring to tackle the cost of living challenges after his Zanu-PF party’s own Women’s League also expressed concern saying “it is surprising that prices continue to rise”.

“The increase in prices is quite shocking,” the league added during its national conference in Harare.

Responding, Mnangagwa said the government would on Saturday announce measures to bring relief to the public.

“My government will tomorrow be announcing concrete measures to tame inflation and unwarranted increases in prices towards securing the incomes and savings of our people, particularly women,” the Zanu-PF leader said in his address.

Rising prices revive memories of hyperinflation seen more than a decade ago when inflation spiralled so far out of control that the central bank in 2008 issued a 100-trillion-dollar note, which has now become a collectors’ item.

The government then ditched the local currency and adopted the US dollar and the South African rand as legal tender.

But in 2019 the government reintroduced the Zimbabwean dollar, which has rapidly been declining in value.