Confederation of Zimbabwe Industries Says Inflation Nears 300 percent

HARARE – Zimbabwe’s annual inflation rate moved within the 300 percent mark in August after rising to 288.6 percent, from 230.4 percent in July, the Confederation of Zimbabwe Industries (CZI) said on Friday.

CZI’s internal statistics same after government stopped releasing annual inflation data in July, possibly to keep the market in the dark after an inflationary rage triggered extensive price hikes in the past few months.

The Zimbabwe National Statistics Agency (ZimStat) was directed to only released month on month inflation data from last month.

This week, said the August 2019 month on month inflation rate had declined to 18.07 percent, compared to a month on month inflation rate of 21 percent in July of the same year.

However, after the move to stop annual inflation, ZimStat’s data now faces credibility crisis, and business lobbies may start computing their own data in the coming months, to help them make decisions.

“Zimbabwe’s annual inflation rate surged from 230.4 percent in July 2019 to an implied rate of 288.6 percent in August 2019. This is an implied rate after ZimStat suspended the publication of year on year inflation data for technical reasons when the economy moved from a multi-currency to a mono-currency regime,” said CZI. 

It said “increasing money supply due to quasi fiscal operations by the RBZ fed into inflation.”, while foreign exchange shortages and volatility in the exchange rate were also behind the inflationary sage.

“The high month on month inflation rate of 18.07 percent though receding is still worrisome because of the increase in money supply emanating from the productive sector facility that was introduced by the RBZ during the Mid Term MPS announcement of 2019. The facility was introduced after the overnight rate was increase from 50 percent to 70 percent to reduce short term speculative borrowing. It is also a matter of concern that the amount of the facility was not stated. Agriculture financing which will widen the budget deficit. The inefficiencies of the interbank market to supply foreign currency to the productive sector. Productive inefficiencies emanating from power outages will result in imported inflation as the country need to import commodities,” noted CZI.

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