Harare – Zimbabwe National Chamber of Commerce CE and economist Christopher Mugaga has sensationally dismissed projections that Zimbabwe’s inflation which has spiked to 175.66% year on year in June will fall to levels of single digit inflation by year end.
This is in response to government’s proposed target of reducing year on year inflation to single-digit figures by the end of the year. The Reserve Bank of Zimbabwe has projected that inflation will fall to between 10 and 15% by year-end.
Since the turn of the year to date, government has embarked on a number of policy shifts chief among them the separation of US dollar balances from local RTGS balances and the denomination of bond notes and coins into RTGS$, and the recent introduction of SI 142 putting an end to the use of multi currencies and establishing the Zimbabwean dollar as the sole legal currency.
Government has in relation to the policy shifts said it is aimed at stabilising inflation and exchange rates. However, for a market suffering among others a lack of confidence in government policies, the market has responded otherwise with rates and prices of goods and commodities maintaining an upward trend.
Speaking to Equity Axis on the side lines of “State of the Industry Update” gathering held in the capital on Monday, Mr Mugaga said the cost of doing business now has risen so significantly compared to any time last year while reiterating inflation remains a threat to viability of businesses with others projecting that it will reach levels of 400% by year end.
“We will continue engaging the government in a number of areas regarding policy making in this country. Private sector in Zimbabwe is quite very robust and I have every reason to believe that it can only improve,” Mugaga said.
On government’s GDP projection of 3.1% growth in 2019, Mugaga said it is impossible highlighting that the relatively low performances in the agriculture and mining sector in comparison to last year hampers any prospects for significant growth in 2019.
“So overall I don’t see a positive growth for 2019, it will be a negative but maybe we need to manage the level of the negative,” he said.
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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.