Zimbabwe's inflation jumps to 1 200%

Zimbabwe's inflation jumps to 1 200%

• Zimbabwe rolls out $100 000 bill

• Zimbabwe has no money to print currency

• Tax war paralyses Zimbabwe bourse

• Zimbabwe: the tragedy of the commoners

• Zimbabwe: the wheels have come off

• Zimbabwe's inflation breaches 1000%

• Inflation data mystery deepens

• Zim abruptly postpones inflation data release

• Zimbabwe bank rate increased

• Mugabe predicts economic growth

• Zim inflation vaults to record 913%

• Coca Cola dries up in Zimbabwe

• Zimbabwe inflation knocks on 800%

• Zim introduces $50 000 bill

• Zimbabwe army chief fears mass unrest

• Gono: Zimbabwe 's inflation to peak at 800%

• Patrick Mlambo: A 100 reasons why Gono should resign

• Gono's 'sleepless nights' over inflation

• Gono fighting a losing battle

• Gono, the Zimbabwean Napoleon

• Patrick Mlambo: The small minds in charge of our economy

• Chido Makunike: Overcoming the 'Messiah Complex'

By Stella Mapenzauswa

ZIMBABWE'S annual inflation rate scaled new heights in May, with prices almost 13 times the level a year earlier, further exacerbating a spiral that has thousands of households struggling to stay afloat.

Figures released by the Central Statistical Office on Friday showed annual inflation last month at a new record of 1,193.5 percent.

On a monthly basis, prices rose by 28 percent compared with 21.1 percent in April.

President Robert Mugabe's government has cited inflation, now the highest in the world, as one of the chief scourges of an economy now in its eighth year of recession.

Analysts said May's figures further undercut Central Bank Governor Gideon Gono's predictions that inflation would ease to 400 percent by December this year and to less than 50 percent by June 2007.

"I think at this rate that (prediction) is now practically impossible, unless we see serious levels of deflation from now on, and I really don't see prices going down," said Farai Dyirakumunda, head of research at Interfin Securities.

"Hyperinflationary expectations are now further entrenched in the economy and the fuel price increases effected recently will have a ripple effect. The ordinary man will probably have to brace for continued hardship," Dyirakumunda told Reuters.

The CSO said medical costs had registered the highest increase in prices over the year at 11,029.9 percent while postal services and hairdressing charges rose 5,180.4 percent and 4,665.6 percent respectively.

Salaries have long failed to keep pace with price hikes, forcing many formerly middle-class Zimbabweans into dire financial straits.

Last month the Reserve Bank unveiled a new 100,000 Zimbabwe dollar note -- worth slightly less than a U.S. dollar -- to cope with soaring prices that force shoppers to carry huge stacks of currency for ordinary purchases.

It said it would not hesitate to move to higher denominations in future if need be.

Analysts see inflation, which first breached the 1,000 percent mark in April, hitting 1,800 percent by year-end.

The central bank has over the last two years consistently missed its inflation forecasts as the government grapples with an economic crisis marked by shortages of foreign exchange and fuel, and unemployment of more than 70 percent.

Mugabe, who has ruled the southern African country since independence from Brtiain in 1980, rejects charges that skewed government policies, including its land reforms, have led to chronic shortages of food, fuel and foreign currency.

Mugabe, 82, whose current term as president expires in 2008, says the economy has been sabotaged by local and foreign opponents of his drive to forcibly redistribute white-owned commercial farms among blacks - Reuters
JOIN THE DEBATE ON THIS ARTICLE ON THE NEWZIMBABWE.COM FORUMS
newsdesk@newzimbabwe.com