ZIMBABWE’S national statistics agency this week moved to defend official inflation data following criticism that its figures seemed to understate resurgent price increases largely driven by an acute foreign currency crisis.
Annualised inflation closed the year at 3,46 percent in December 2017, a five-year peak, as the shortage of foreign currency forced most producers and retailers to source funds at a premium on the black market.
The IMF had projected inflation to reach seven percent at the end of 2017. Last August, the governor of the Reserve Bank of Zimbabwe John Mangudya, had projected annual average inflation of between two and three percent.
The governor had initially forecast average inflation for 2017 of between one and two percent in his January Monetary policy statement, but reviewed the projection upwards in the mid-term policy review after the country’s headline inflation moved into positive territory in February 2017 for the first time in close to three years.
Latest Zimbabwe National Statistics Agency (ZIMSTAT) figures released this week show that annual headline inflation has risen to its highest level in more than five years after the statistical agency reported a year on year inflation rate for the month of December 2017 of 3,46 percent, representing a 0,49 percentage gain on the November figure of 2,97.
ZIMSTAT last reported a headline inflation rate higher than this of 3,63 percent in August 2012.
With analysts and independent economists suggesting inflation was running higher than official data was showing, ZIMSTAT sought to justify its methods. In a statement accompanying the December inflation report, ZIMSTAT said it compiles the statistics using the same international guidelines and manuals that the other national statistical offices use.
“In compiling the Consumer Price Index, ZIMSTAT, like all other national statistical offices uses the United Nations Statistical Commission’s guidelines and manuals,” ZIMSTAT said.
The agency also dismissed assertions by American economist Steve Hanke’s that Zimbabwe, which registered 500 billion percent inflation in December 2008, has slipped back into hyperinflation.
“Technically, hyperinflation is defined as a situation where prices increase so fast that the rate of inflation is 50 percent or more per month. The rate of inflation in Zimbabwe is currently below 10 percent meaning that Zimbabwe is not in hyperinflation,” ZIMSTAT stated .
British research firm, BMI contends that ZIMSTAT’s decision to compile and report inflation quoting prices in hard currency terms may distort the figures.
Local research firms, Econometer Global Capital and Equity Axis, have also expressed doubts about ZIMSTAT’s figures.-Fingaz
