Inflation reaches all-time high post-dollarisation — Zimstat

HARARE - Zimbabwe's annual inflation rose to 5,39 percent in September from 4,83 percent recorded in August, latest data shows.

Figures released by national statistical agency, Zimstat, yesterday revealed that the 5,39 percent is highest since the economy was formally dollarised in February 2009, surpassing 5,3 percent in May 2010.

“Month on month, inflation rate in September 2018 was 0,92 percent gaining 0,53 percentage points on the August 2018 rate of 0,39 percent,” Zimstat said.

This means that prices as measured by the all items Consumer Price Index (CPI) increased by an average rate of 0,92 percent from August 2018 to September 2018.

“The month-on-month food and non-alcoholic beverages inflation rate stood at 1,05 percent in September 2018, gaining 0,43 percentage points on the August 2018 rate of 0,62 percent.

“The month-on-month non-food inflation rate stood at 0,85 percent, gaining 0,57 percentage points on the August 2018 rate of 0,28 percent.

“The CPI for the month ending September 2018 stood at 101,97 compared to 101,04 in August 2018 and 96,75 in September 2017,” said Zimstat.

Some critics, however, say the inflation rate is higher than the 5,39 percent announced yesterday with companies increasingly relying on internally generated inflation data.

The September figure is now above December 2018 projection of five percent by the World Bank.

The World Bank said the country’s inflation would reach that level as it expects to see the government continuing to finance the fiscal deficit through borrowings from the Reserve Bank of Zimbabwe and commercial banks, which it says should continue to push consumer prices up.

The International Monetary Fund (IMF) projections see the country’s inflation reaching 6,3 percent by year-end.

The Reserve Bank of Zimbabwe (RBZ), however, says it expects inflation in 2018 to be below seven percent by December.

RBZ said it expects a reduction in food imports to subdue prices and keep inflation at bay.

The country’s inflation opened at 3,52 percent in January before easing to 2,98 percent in February.

In March, the figure was 2,68 percent, April — 2,71 percent, May 2,71 percent, June 2,91 percent and July 4,29 percent.

Renowned US economist Steve Hanke said Zimbabwe’s 2018 cumulative inflation hit 155,8 percent as of October 12.

According to Hanke’s projections, the first country with highest inflation in the world is Venezuela, at 2 500 000 percent, followed by Iran at 273 percent and Zimbabwe at 155,8 percent.

“My weekly world inflation roundup: New to the list is Zimbabwe, which now holds the third highest inflation rate in the world,” Hanke posted on his twitter account.

Hucklib Limited, a local think-tank, said inflation would continue rising due to a number of factors, such as escalating parallel currency market rates, as the general prices of products were anticipated to keep rising.

“The rise in the general price level was also as a result of government increasing the civil service wage bill and its high election spending.

“There was also an increase in the price of fuel, which is the biggest single import for Zimbabwe.

“Speculative pricing is also the order of the market lately, as traders who stock their merchandise for a long period also budget for premium increases in their pricing models,” the think-tank said.

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