New Zimbabwe.com

Zim Inflation rate hits 67 percent , new inflation calculation base unveiled

By AloisVinga


ZIMBABWE’s annual inflation has gone up 7.41 points to 67 percent the Zimbabwe National Statistics Agency (Zimstat), revealed Tuesday.

The statistics agency, said month-on-month inflation for the period increased by 4.38 percent up from 1.67 percent recorded in February.

Zimstat also announced that beginning March 2019, a new Consumer Price Index (CPI) with new weights and classifications that are internationally recognised will be used to calculate inflation from now on.

The new CPI to be used is known as the Classification of Individual Consumption by Purpose (COICOP) will be used.  COICOP, is a Reference classification published by the United Nations Statistics Division that divides the purpose of individual consumption expenditures incurred by three institutional sectors, namely householdsnon-profit institutions serving households, and general government.

Zimstat said using a similar method of calculating inflation will allow inter-country comparisons of the CPI and the rate of inflation.

Market analysts argue that if Zimstat had continued using the old calculation system, the inflation rate for the month is would now be over 166 percent effectively pushing the country into the hyperinflationary period.

Currency expert , economist Steve Hanke has since argued that the nation’s inflation rate has surpassed 300 percent throwing the country into a basket of the world’s highest inflation nations.

However, Finance Minister, Mthuli Ncube has on numerous occasions dismissed Hanke’s high inflation figures arguing that his methods are not consistent with Zimbabwe’s standards.

“Hanke is using something else like the replacement cost approach to calculate inflation which is why he is coming up with much higher figures. He must not spend time quarrelling with us, we hear him, we know it, there is no need to fight because figures are what they are. Different methods are used to calculate inflation,” Ncube said.