Zimbabwe's annual inflation rose to 613.2 percent in January, near its all time peak, which could fan anger against President Robert Mugabe's government by the millions struggling to survive. The January figure compared with 585.5 percent in December as housing and food prices raced into the stratosphere. It was close to the all time high of 622.8 percent hit during the same period in 2004, official data showed on Monday. Zimbabwe's inflation rate is one of the highest in the world and compares with the average for sub-Saharan Africa of 21.3 percent in 2005, excluding Nigeria and South Africa.Once a regional breadbasket, Zimbabwe has grappled with rampant inflation during six years of recession. Shortages of foreign exchange, fuel and food have been widely blamed on government mismanagement. "With no legitimate avenues of expressing discontent, rising inflation may form the basis of a groundswell of mass discontent," said Eldred Masunungure, chairman of the political science department at Harare's University of Zimbabwe. "We have a very pessimistic situation and people's patience is fast being eroded, which should worry the government as there could be a sudden explosion of mass anger." Mugabe has been accused of using tough security and media laws to silence political dissent.
The central bank has forecast inflation could rise to between 700-800 percent by March before it starts to slow down, although some analysts say Zimbabwe could see four digit inflation this year. On a monthly basis the consumer price index rose by 18.6 percent, according to the Central Statistical Office (CSO).
The CSO said a family of five will now require an average of 20 million Zimbabwe dollars every month to remain above the official poverty line, up 16 percent from December. On average, Zimbabwean workers, who have borne the brunt of the country's economic crisis, earn Z$5.5 million each month. But many people have to get by on far less in a country with an unemplmoyment rate of around 70 percent. "It seems we are going to be stuck with double digit month on month figures which means annual inflation will rise faster," University of Zimbabwe business studies professor Anthony Hawkins told Reuters.
Analysts said annual inflation was likely to quicken at a faster rate in the next two months, pushed by increases in the price of basic commodities and fuel. Price pressures have also been driven by a weakening Zimbabwe dollar, which has boosted the cost of imports. The central bank has since capped its continued slide, a move that has seen a resurgence of the black market. "The underlying problem that needs to be addressed to tackle inflation is to stimulate economic production ... producers have to feel secure to produce, which is not happening," Harare based economist James Jowa said. "Confidence has been severely eroded over time due to lack of a clear policy direction in the economy, especially in agriculture," he said.
Industrial production has fallen to below 30 percent of capacity and commercial agriculture has plummeted 60 percent in the past five years, which critics blame on Mugabe's seizure of land from white commercial farmers for redistribution to blacks. Mugabe denies his policies are responsible for the country's economic woes, maintaining the economy has been sabotaged by Western powers opposed to the seizures.
$1=99,201 Zimbabwe dollars
Today, that is. More tomorrow.
| And I used to make fun of the Laos when the kip was at 1:1 with the bobby pin. Maybe Bob should ask Vientiane for financial advice. |