14 March 2007

Zimbabwe: 'We Don't Doctor Inflation Data'

Harare — CENTRAL Statistical Office acting director-general Mr Moffat Nyoni on Monday defended his body's data collection process stressing that it does not doctor inflation statistics.

"If people or economists are really concerned and intent on verifying the figures we are ready to do that.

"The CSO always strives to be objective in its data collection processes, and this is done by well-experienced and trained statisticians who produce accurate data," said Mr Nyoni.

He continued: "We always publish reliable data computed from authentic market statistics. Usually we go where people are normally expected to do their shopping and try our best to capture actual prices obtaining in the market.

"Besides, the CSO is a member of the Sadc body on statistics, and this guarantees that our numbers are cross-checked by the institution to ensure fairness."

He said the CSO, like every other institution, had its own challenges, but this did not affect its inflation figures which it said were reliable and accurate, taking into account that these were based on estimates.

There were fresh worries from economists this week over what they described as "manufactured" statistics after seeing Zimbabwe's annual rate of inflation for February climb much less than their forecasts to a record 1 730 percent, up marginally 136,3 percentage points.

The month-on-month figure slowed to 37,8 percent from 45,4 percent in January, which was at odds with the price upsurge seen in the run-up to the Reserve Bank of Zimbabwe's January monetary policy review statement.

Other analysts said, however, the two-week long pricing frenzy in January, which spilled over into February, should have sparked a major leap in both the year-on-year and month-on-month numbers.

Interfin Securities research analyst Mr Farayi Dyirakumunda explained: "We had forecast annual inflation to touch 2 000 percent given the way prices shot up during February.

ZABG economist Mr David Mupamhadzi felt, however, inflation had risen within reasonable levels.

He said: "The figure is a bit on the lower side. I think most of the huge price adjustments took place after the 15th of February, which is the cut-off date for calculating that month's inflation figures. We can expect inflation to hit unimaginable levels in March."

Prices of most basic commodities rose in unprecedented fashion in late January on speculation, particularly that of devaluation of the Zimbabwe dollar, which never took place.

The CSO reported on Monday that the CPI inflation all items index inched 37,8 percent stronger to 1 334 521.7 points from 968 338,9 points in January.

The biggest increases, according to the CSO, were reported in non-food inflation, which was up 55 percent (on a monthly basis) versus food inflation, which for the second month running has run slower at 37,2 percent.

Vegetables, mineral water, soft drink and other fruit juices reported the highest increase within the food basket.

In the non-food basket, transport rose 52 percent, while alcoholic beverages and tobacco moved up 55 percent month-on-month with non-durable products closing 43,9 percent stronger on January data.

On average, price hikes stood at 200 percent but this was not captured in the latest inflation data, some analysts said, with the annual rate showing a marginal increase of almost 10 percent.

Further, economists argue, because the CSO captures only official data price, fluctuations on the black market were not factored into national CPI numbers.

Besides, most foodstuffs are readily available on the black market whereas the official market has been hit by sharp supply bottlenecks.

Various other political connotations have also been given in explanation to the CSO numbers.

Some sections of the market have previously doubted the body's statistics, which they viewed as skewed in Government's favour. But these claims have never been substantiated.

Analysts claim the situation on the ground is worse, and, according to their estimates, inflation is sitting somewhere in the region of between

2 000 percent and 2 500 percent.

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