ZIMBABWE’S year-on-year inflation jumped to 256,9% this month, up from 191% in June, evoking memories of the 2008 hyper-inflationary era nightmares as prices of basic goods continue to skyrocket.
Statistics released yesterday by the Zimbabwe National Statistics Agency (ZimStat) show that month-on-month inflation for June was at 26,6%.
“The month-on-month inflation rate in July 2022 was 25,6 % shedding 5,1 percentage points on the June 2022 rate of 30,7%,” ZimStat said.
“The year-on-year inflation rate (annual percentage change) for the month of July 2022 as measured by the all items Consumer Price Index (CPI) stood at 256,9 percent. The CPI for the month ending July 2022 stood at 10,932.83 compared to 8,707.35 in June 2022 and 3,062.93 in July 2021.”
The total consumption poverty line for one person stood at $23,479.00 in July, a 27,4% increase compared to $18,425.09 in June. This means a family of six requires $140,874 a month, up from $110 550 in June.
Presenting the 2022 Mid-Term Review and Supplementary Budget speech in Parliament on Thursday, Finance minister Mthuli Ncube blamed external pressures for the rising inflation.
“This has been driven partly by external factors which impacted negatively on import prices of raw materials, food and liquid fuels. Imported inflation contributed significantly to domestic inflation through cost push factors, while domestically, adverse inflationary pressures and exchange rate volatility were the main drivers of inflation,” Ncube said.
“Mr Speaker Sir, let me assure the nation that government is ready to implement further measures necessary in order to restore economic stability.”
However, former Finance minister Tendai Biti (CCC) said Ncube’s measures were failing to tame inflation.
“The minister was flat from what he was presenting. He missed an excellent opportunity to address inflation. There is an oversupply of money in the economy. We are now back to 2008,” Biti said.
Economist Gift Mugano said the ever rising inflation rate was an indication that government policies were not effective.
“As long as the economy has not dollarised, we will continue having a continued rise in the inflation rate,” Mugano said.
“As it is now, the government is in a fix. It will be difficult for it to raise the interest rate from 200% to tame the rising inflation. Prices of commodities will continue to rise, eroding the consumer’s buying capacity and bringing the economy to its knees.”
There have been calls for full dollarisation because of rising inflation, but the government insists on a de-dollarisation strategy.
Workers in the private and public sector are now pushing for United States wages to hedge against the rising cost of basics.
Some retail shops are now exclusively pricing their products in US$, shunning the local currency.