Zimbabwe inflation hits 2.2 million percent
HARARE (AFP) — Zimbabwe's inflation rate, already the world's highest, hit an astronomical 2.2 million percent Wednesday after Robert Mugabe's re-election in a one-man poll critics had said the nation could ill afford.
After months of silence on the inflation rate, central bank governor Gideon Gono let slip it was well into seven figures as he rejected suggestions by a leading economist that it was in reality many times higher.
"Statistics provided by the CSO (central statistical office) indicate that it is now at 2.2 (million percent)," Gono said in a brief address in Harare ahead of a speech by Mugabe, the country's 84-year-old president.
The figure is the first from the authorities in Zimbabwe since the announcement of the rate for February, when it was put at 165,000 percent.
The head of the CSO, Moffat Nyoni, confirmed the figure but said it was only a rough barometer as it was based on limited data.
"The information was based on fewer observations than we would be confident with due to scarcities. However, with the information we have managed to obtain, this is the rate of inflation," he told AFP.
Mugabe, who was controversially re-elected for a sixth term in office last month in a ballot boycotted by the opposition, said increasing levels of production was key to efforts to tame inflation.
"As a country our declared battle against the scourge of high inflation must be accomplished," he said.
"The more goods we have, the less demand there will be ... Once demand is satisfied, then prices will begin to fall."
The impact on consumers of the inflation juggernaut is now such that prices of basic goods like bread, when available, go up by 30-40 percent per day.
For example, the price of a loaf of bread on Monday which stood at 60 billion Zimbabwe dollars -- one US dollar at the then black market rate but 400 according to the official exchange -- had risen to 100 billion little more than 24 hours later.
A three-star hotel in the capital has been hiking its room rates by around 300 percent every three days and in the latest round of increases, rates shot up from around four trillion dollars to 10 trillion.
John Robertson, the economist who prompted Gono into revealing the official rate, said the rise was partly a result of the election campaign when the ruling party handed out equipment as apparent election sweeteners in rural areas.
"This was one of the most expensive elections. There were free tractors, free combine harvesters and free equipment which will produce nothing because there are no inputs such as seeds and fertiliser," Robertson told AFP.
He insisted that the figure cited by Gono was outdated and did not take into account splurges ahead of polling on June 27.
"That figure which Gono announced is probably for May. The real figure for June could be between 10 to 15 million percent."
Tapiwa Mashakada, the opposition Movement for Democratic Change's economy spokesman, also said Gono underplayed the scale of the crisis.
"That figure is grossly understated. The local unit is losing value every day, both at the black market and at the interbank rate," he said.
Once one of Africa's best performing economies, Zimbabwe has been in meltdown since the turn of the decade when Mugabe embarked on a controversial land reform programme which saw thousands of white-owned farms seized by the state.
Inflation first passed the 1,000 percent threshold in May 2006 and has been rising almost continuously ever since.
The government has tried a series of measures to curb inflation, including ordering shops and businesses to slash the price of goods last year.
The plan was abandoned after it led to widespread shortages.
Mugabe, who often blames Zimbabwe's economic woes on a package of targeted sanctions imposed by the West, reiterated his attack on the "illegal" measures.
"We must be of one accord. The sanctions must be defeated," he said.
