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Inflation skyrockets as Mugabe targets sixth term

©

Latest update : 2008-02-21

Zimbabwe's annual inflation rate hit 100,000% in January, highlighting the economic hardship suffered by the population ahead of next month's election.

Zimbabwe's annual inflation rate has soared to over 100,000 percent, weeks ahead of elections in the southern African country, according to official figures obtained by AFP on Wednesday.
   
"The year-on-year inflation rate for the month of January 2008, as measured by the all items Consumer Price Index (CPI) stood at 100,580.2 percent, gaining 34,367.9 percentage points on the December rate of 66,212.3 percent," the Central Statistical Office (CSO) said in a statement.
   
"This means that prices as measured by the all items CPI increased by an average of 100,580.2 percent between January 2007 and January 2008."
   
Inflation for food and non-alcoholic beverages reached 105,428.0 percent while non-food inflation was 97,885.7 percent," said the statement.
   
Zimbabwe's economy has been in a tailspin for the past seven years, characterised by shortages of basic commodities like sugar, cooking oil and petrol.
   
While the products are readily available on a burgeoning black market, many Zimbabweans have resorted to buying their essentials from neighbouring countries like Botswana, South Africa and Zambia.
   
At least 80 percent of the population is living below the poverty threshold, often skipping meals to stretch their income which frequently fails to cover basic needs.
   
Rangarirai Mberi, news editor of the Financial Gazette business weekly, said the state of the economy would feature prominently in next month's presidential and parliamentary elections.
   
"Numbers no longer shock people," he told AFP. "Zimbabweans have learnt on how to live in a hyper inflationary environment, but the question is how long can this continue?
   
"What is clear is that the state of the economy would feature prominently (in polls set for March 29)."
   
Zimbabwe's veteran leader Robert Mugabe, who turns 84 on Thursday and has been in power since Zimbabwe's independence from Britain in 1980, will contest his sixth term in office next month.
   
He will be challenged by his former finance minister Simba Makoni, and opposition Movement for Democratic Change leader Morgan Tsvangirai.
   
The government has introduced several measures to try and curb inflation, including imposing a ceiling on the prices of some goods and services and knocking three zeros off the country's currency.
   
The CSO last released monthly inflation statistics to the media in September. The November figure was only released by the central bank chief in a statement last month.
   
Godfrey Kanyenze, chief economist of the Zimbabwe Congress of Trade Unions, said the rise could partly be blamed on money being printed for electioneering purposes.
   
"The situation is out of control. You can feel it, sense it, feel it and see it," Kanyenze said.
   
"This latest increase in inflation is as a result of excessive money printing which is being used for election campaign purposes. What we are being told is the official figure, yet the actual rate could be around 150,000 percent."
   
According to David Mupamhadzi, an economist with the Zimbabwe Allied Banking Group, "the battle on the inflation front has gone out of hand.
   
"This latest increase will have serious repercussions on industry and the welfare of the ordinary man and women on the street. Already prices of goods are beyond the reach of many, but this will now worsen."

Date created : 2008-02-20

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