9 October 2008

Zimbabwe: Inflation Soars to 231 Million Percent

Harare — ZIMBABWE'S annual inflation rate rose to 231 million percent in July, driven faster by food prices, according to official Government statistics.

The annual rate of price growth was 11,2 million in June.

It therefore gained 219,8 million percentage points, said the Central Statistical Office in a statement released yesterday.

What it means is on average goods in July this year were about 231 million times as expensive as they were 12 months earlier.

The month-on-month rate rose 1 760,9-percentage points on the June rate of 839,3 percent to 2 600,2 percent.

Bread and cereals were the main drivers.

Depending on availability, a loaf of bread now costs between $7 000 and $10 000.

Bread prices have been pushed up by wheat shortages as bakers are relying on imports.

The latest inflation figures show that Zimbabwe is suffering the highest inflation rate in the world.

While several measures have been put in place to calm inflation, most were ill-fated.

The Government blames this on illegal sanctions imposed by Britain and its allies.

Zimbabwe is suffering from foreign currency, fuel and food shortages.

Prices of goods and services are rising on daily basis.

The economy has contracted almost 50 percent over the past 10 years on pathetic performance by all sectors.

This was coupled by corruption in both the public and private sectors.

Farm and factory output sharply fell.

Tourism also suffered a major setback as holidaymakers shunned the country on perceived country risk.

Economists are hoping the economy could recover on the formation of an inclusive Government.

The main political parties - two MDC formations and Zanu-PF - last month signed a power-sharing deal to form an inclusive Government.

Various international bodies are behind the deal and are interested in helping Zimbabwe, once an economic powerhouse in southern Africa.

A UN sponsored report on Zimbabwe's economic revival says the country needs 12 years to get back where it was in the early 90's.

About US$5 billion will be needed.

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