Zim price freeze 'indefinitely'
15/07/2007 12:02  - (SA)  

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Harare - Zimbabwe's government will this week enforce an indefinite price freeze in a bid to rein in runaway inflation that has ravaged consumers and increased political tensions, official media reported on Sunday.

President Robert Mugabe's government has ordered a roll back of all prices to June 18 levels after accusing businesses of unjustified increases and has formed a crack team that includes the police and military, to enforce the directive.

Desperate consumers, used to daily price increases, have cheered the price cuts and embarked on buying sprees that have left most shop shelves empty.

The initial freeze was meant to last until Aug. 1 but the government-owned Sunday Mail reported that the government had finalised a statute to be published this week to extend the price cuts indefinitely.

Zimbabwe is grappling with a severe economic crisis marked by inflation above 4 500%, rising unemployment and shortages of foreign currency, fuel and food.

Last week the Central Statistical Office said it may stop publishing inflation data., a move viewed by analysts as aimed at shielding the government from criticism of its failure to control soaring prices.

The government has set profit margins from producers to wholesalers at 5% and at 10% for wholesalers to retailers. But basic goods like maize-meal, sugar and cooking oil have disappeared from shelves as suppliers cut production.

Economists said this would accelerate Zimbabwe's economic decline as businesses would not be able to sustain production at a loss.

Mugabe has threatened to seize and nationalise companies he accuses of hiking prices without justification as part of a Western plot to topple his government.

More than 2 000 business people and companies have been arrested and fined while over 100 public commuter vehicles have been impounded for overpricing.

Mugabe, in power since independence from Britain in 1980, denies charges he has run down a once prosperous economy and instead accuses the West of sabotage as punishment for handing white-owned commercial farms to landless blacks.

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