Zim inflation reaches 75,86 percent

ZIMBABWE’S year-on-year inflation rose to a ten-year high of 75,86 percent in April from 66,8 percent in March, pushed by persistent increases in the price of basic goods, statistics agency Zimstats said on Wednesday.
This comes as the value of RTGS dollar has been deteriorating due to the country’s growing reliance on imports as well as the general lack of confidence in the formal processes within the economy.
“The year-on-year inflation rate for the month of April 2019 as measured by the all items Consumer Price Index (CPI) stood at 75,86 percent, while that of March 2019 rate was 66,80 percent,” Zimstats said.
“This means that prices as measured by the all-items CPI increased by an average of 75,86 percent between April 2018 and April 2019,” the national statistics agency said.
On a monthly basis, prices increased 5,52 percent in April, compared to 4,38 percent the previous month.
Central bank governor John Mangudya recently said annual inflation should fall to between 10 and 15 percent by the end of the year, but economists say the figure could be higher due to price pressures from the exchange rate and other factors.
Yesterday the RTGS$ was trading against the U.S. dollar on the official market at a rate of 3,3:1, which even though significantly higher than the market’s February opening rate of 2,5:1, was still considerably lower than the parallel market rate of 5,2:1, as reported by local independent analysts group Marketwatch.
With price increases persisting with no sign of relief in the foreseeable future, analysts have called on the liberalisation of the interbank market to promote the flow of hard currency in the economy’s official channels.
“On the black market, people willing to sell U.S. dollars can get RTGS$5 for each U.S. dollar offered, but only about RTGS$3 through their bank,” prominent economist John Robertson told The Financial Gazette this week.
“If the market could establish a single rate, and if this were set by nothing but market forces, which means no interference from the reserve bank or from government, prices would begin to stabilise and business planning would become much more effective.
“Under such conditions, good levels of business would be sustained, but under current conditions, business is being suppressed and many companies are concerned about their ability to survive,” he said.

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