Zim inflation to hit 500pc

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Dr Gift Mugano

BLESSING MADZIWANZIRA

Zimbabwe’s annual inflation rate is likely to accelerate to more than
500 percent by year-end due to government’s failure to implement
policy measures to stabilise prices of basic commodities, an expert
warned Thursday.

Speaking at the launch of the state of economy report, which was held
in the capital by the Daily News in conjunction with the African
Economic Development Strategies and AB Communication, economist Gift
Mugano said runaway inflation will decimate Zimbabwe eroding the value
of money making wages and salaries worthless.

Mugano believe that failure to put in place drastic measures and
inflationary pressures will ravage the economy.

“It’s a tragedy, because the economy is in bad share with conditions
continue to worsen. By the end of this year inflation will likely hit
above 500 percent. The country is moving from the chromic inflation to
hyperinflation,” Mugano said.

Last month, Finance minister Mthuli Ncube announced that ZIMSTAT will
stop publishing  the annual inflation rates on the battered economy,
which reached a decade high of 176 percent in June until February next
year.

This is the highest rate since runaway money-printing and associated
hyperinflation forced Zimbabwe to ditch its defenseless currency in
2009 in favour of a multi-currency regime. Harare, however, abandoned
the multi-currency regime in June this year, leaving the Zimbabwe
dollar as the sole legal tender.

The Zimbabwe dollar has tumbled by more than 60% in the past
fortnight, lingering at 1:12 against the United States dollar on the
formal market. The exchange rate in the black market showed the
pressure is even more. To get US$1, one has to folk out ZWL$16 on
Friday.

Prices of basic goods, however, continue to skyrocket.

But several economists both local and international are doing
independent calculations. Mugano, on Thursday said his annual
inflation calculation has now reached about 230%, triggered by sharp
rises in basic commodity prices.

The country has continued to suffer shortages of hard currency and fuel.