Harare – At a time the country has witnessed abrupt policy shifts particularly on the monetary policy front and grappling through a general economic slowdown coupled with power cuts, unending fuel shortages and foreign currency shortages, the pit seems bottomless for Zimbabwe as inflation rose to a staggering 175.66% year on year in the month of June.
According to latest figures from the Zimbabwe National Statistics Agency (ZIMSTAT), the surge in inflation from an April position of 97.85% was largely driven by food inflation which jumped to 251.10 CPI points from 126.30 points.
Transport inflation went up from 106.60 to 123.80 CPI points.
On a month on month basis, inflation increased from 12.54% in May to 39.26% in June adding further to fears of a hyperinflation which is considered starting at a monthly inflation rate of 50%.
Government has maintained a position that inflation will remain high until October this year after which it will begin to fall going into early next year.
Earlier in March this year, Reserve Bank Governor Dr John Mangudya sensationally claimed that Zimbabwe’s average annual inflation should fall to between 10 and 15 percent.
Subsequent to the introduction of Statutory Instrument (SI) 142 which effectively banned the use of multi currencies and the introduction of the Zimbabwean dollar as the sole legal tender, government said the move is aimed at stabilising inflation and the exchange rates.
Although exchange rates on the parallel exchange market temporarily back slide due to shock, they have since shoot upwards again whilst the retail and the general business sector is still lost between the lines as far as pricing of goods and commodities is concerned.
The effect of SI 145 will surely be factored in the July inflation figures to see what impact it has had measured against what the government said.
Some economists have however, maintained that the country is speeding towards hyperinflation in 2019 whilst the IMF and World Bank have projected that the country’s GDP will contract this year.
Equity Axis News
Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment. He can be contacted through the following email links, email@example.com and firstname.lastname@example.org.