|
Some relief seen for Zimbabwe
17/07/2007 17:09 - (SA)
Harare - Zimbabwe's month-on-month inflation rate is expected to drop by more than 50% this month following the imposition of blanket price controls by President Robert Mugabe's government, state media said on Tuesday.
The government, embarrassed by the highest rate of inflation in the world, stopped releasing inflation data two months ago, when the annual rate of inflation had reached 3 714%.
Figures leaked to the independent press showed annual inflation in May had quickened to more than 4 500%.
Month-on-month inflation was more than 100% in April, putting Zimbabwe's economy firmly into the hyperinflationary bracket.
But that should change because of the price slashes, the official Herald announced proudly on Tuesday.
Since late last month, Mugabe's government has sent price inspectors and police on visits to shops and businesses, ordering them to cut prices by at least 50%.
Now the month-on-month inflation rate should tumble, said the Herald, quoting state-approved analysts.
"The move taken by the government to slash prices is commendable with monthly inflation currently standing at 100%, by next month it will be down by almost more than 50%," Farai Dyirakumunda, an economist with a financial services group told the Herald.
The paper said monthly inflation figures for July, due to be announced in August, might even be as low as 10%.
But as shortages grip Zimbabwean supermarkets - these days there is hardly anything to buy in many shops - another economist warned that the drop in inflation would be technical.
"To suppress inflation without a corresponding increase in the supply of goods and services would trigger more negative effects on the economy," said Bothwell Dheka, an economist in the Zimbabwe National Chamber of Commerce.
Presently, the industry is distressed and piling more pressure on them without tangible supporting measures will likely increase inflation, he said.
Since the price controls were imposed, shop shelves have been fast emptying of products like meat, soap, flour, cooking oil and sugar. Fuel stations have run dry.
In a hint of worse things to come, supermarkets were on Tuesday reported to not be receiving supplies from manufacturers.
When the government launched its blitz on prices, economists and the main opposition leader Morgan Tsvangirai warned that the honeymoon of low prices for Zimbabwe's inflation-weary consumers would be very short.
Already many basic goods have resurfaced on the black market at much higher prices than they were ever sold in the shops.
Sapa-dpa
- SAPA
|
News
Zimbabwe Special Report
