HARARE – Inflation is on the rampage in Zimbabwe, with the year on year rate for the month of October spiking by as much as 15.46 percentage points to 20.85 percent, Zimbabwe Statistics (Zimstats) said on Tuesday, further highlighting the scourge of price hikes emanating from rising parallel market currency rates in the past two months.
Reserve Bank of Zimbabwe governor, John Mangudya had earlier said inflation was set to be contained within the 7 percent regional threshold but the announcement by Zimstats has left experts and economists saying Zimbabwe’s economy is teetering on the edge.
“The year on year inflation rate (annual percentage change) for the month of October 2018 as measured by the all items Consumer Price Index (CPI) stood at 20.85 percent, gaining 15.46 percentage points on the September 2018 rate of 5.39 percent,” said Zimstats on Tuesday.
It further said the “year-on-year food and non-alcoholic beverages inflation prone to transitory shocks stood at 26.78 percent whilst the non-food inflation rate was 18.06 percent” during the same period.
Tynos Musole, a junior analyst with experience in insurance industry said “mitigating interventions that at least slow the rate of decay” were needed as a “a panicky economy will exacerbate the situation” especially at a time Zimbabwe is resisting austerity measures.
“Mangudya said inflation figures between 3 percent to 7 percent are optimal. Any inflation beyond 7 percent will increase demand for wage adjustments. We are now playing on slippery slopes,” Tweeted Musole.
The consumer price index for Zimbabwe for the month of October stood at 118.73 compared with 101.97 in September 2018 and 98.24 in October 2017.
Other economists dispute the official inflation stats issued by the government, saying the yearly inflation rate may have climbed up to levels around 300 percent. Some government workers such as teachers have started to demand payment in forex as the economy increasingly dollarises.
The government has been blamed for excessively printing bond notes which have fueled inflation owing to continued weakness in the quasi-currency President Emerson Mnangagwa’s administration still insists has equal value to the greenback.