Little sign of upturn despite Zimbabwe inflation slowdown
Monday, 27 August 2007
HARARE, Aug 26 (AFP): A drop in the monthly inflation rate may have been greeted with sighs of relief by the Zimbabwean government, but analysts and consumers have seen little evidence that the economy has turned a corner.
After suppressing inflation data since May, the central statistics office announced last week that while the annual rate had hit a new high of 7,634.8 per cent, month-on-month inflation in July was 31.6 per cent, a fall of 54.6 percentage points on the June rate.
Finance Minister Samuel Mumbengegwi said the figure vindicated the government's imposition of price cuts in late June which effectively forced businesses and retailers to halve their tariffs.
But with shelves bare of everyday commodities such as cooking oil and sugar, most Zimbabweans find themselves paying well above the official rate on the black market where the decline in the official inflation rate is irrelevant.
"The ordinary consumer is paying more than the actual price. This is the real inflation, not the inflation they show on graphs," said Daniel Ndlela, an economist with Zimconsult. "The said deceleration is only good for those who want to believe their own lies."
Ndlela said there was evidence of crisis everywhere, citing an example of people who were lined up at a hardware store to buy cement at the government price of 150,000 dollars (0.75 US dollars) per 50 kilogrammes.
"The queue resembled a desperate situation of people trying to enter Rufaro (in Harare) stadium to watch a popular soccer match," he said.
The prospective buyers were not "building homes or anything, but they will just re-sell the same bag at 1.5 million around the corner. That is real inflation, not what we hear."
Lucky Mapfumo, a 23-year-old University of Zimbabwe medical student, said a slowdown of the inflation juggernaut meant little if there was nothing to buy.
"I have plenty of money on me, but I can not buy anything because there is nothing in the shops," said Mapfumo.
"We heard the government reduced prices, but I don't remember the last time I had bread and now we hear that inflation is slowing down."
Conscious of the widespread shortages, the government announced last week the prices of some goods such as cooking oil and sugar could be increased but most shops in the capital Harare remained bereft of such items.
While the price crackdown was initially welcomed as it enabled Zimbabweans to stock up on goods which had been out of their price range, the subsequent shortages as a result of manufacturers being unable to cover their costs has stoked resentment towards the government.
After suppressing inflation data since May, the central statistics office announced last week that while the annual rate had hit a new high of 7,634.8 per cent, month-on-month inflation in July was 31.6 per cent, a fall of 54.6 percentage points on the June rate.
Finance Minister Samuel Mumbengegwi said the figure vindicated the government's imposition of price cuts in late June which effectively forced businesses and retailers to halve their tariffs.
But with shelves bare of everyday commodities such as cooking oil and sugar, most Zimbabweans find themselves paying well above the official rate on the black market where the decline in the official inflation rate is irrelevant.
"The ordinary consumer is paying more than the actual price. This is the real inflation, not the inflation they show on graphs," said Daniel Ndlela, an economist with Zimconsult. "The said deceleration is only good for those who want to believe their own lies."
Ndlela said there was evidence of crisis everywhere, citing an example of people who were lined up at a hardware store to buy cement at the government price of 150,000 dollars (0.75 US dollars) per 50 kilogrammes.
"The queue resembled a desperate situation of people trying to enter Rufaro (in Harare) stadium to watch a popular soccer match," he said.
The prospective buyers were not "building homes or anything, but they will just re-sell the same bag at 1.5 million around the corner. That is real inflation, not what we hear."
Lucky Mapfumo, a 23-year-old University of Zimbabwe medical student, said a slowdown of the inflation juggernaut meant little if there was nothing to buy.
"I have plenty of money on me, but I can not buy anything because there is nothing in the shops," said Mapfumo.
"We heard the government reduced prices, but I don't remember the last time I had bread and now we hear that inflation is slowing down."
Conscious of the widespread shortages, the government announced last week the prices of some goods such as cooking oil and sugar could be increased but most shops in the capital Harare remained bereft of such items.
While the price crackdown was initially welcomed as it enabled Zimbabweans to stock up on goods which had been out of their price range, the subsequent shortages as a result of manufacturers being unable to cover their costs has stoked resentment towards the government.