Zimbabwe inflation rate soars to 175%

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Zimbabwe in 2016 began issuing "bond notes", a parallel currency meant to be equivalent to the US dollar, when there was a shortage of cash circulating in the country
By :

AFP

Harare – Zimbabwe’s annual inflation rate hit 175 percent in June, official data showed Monday, stoking fears of a return of the hyperinflation that wiped out savings ten years ago when the economy collapsed.

Supplies of essentials such as bread, medicine and petrol have regularly run short in the country as price increases hit their fastest pace since the government was forced to abandon the Zimbabwe dollar in 2009.

“The year-on-year inflation rate for the month of June 2019 as measured by the all items consumer price index stood at 175.66 percent while that of May 2019 was 97.85 percent,” the Zimbabwe National Statistical Agency said in a statement.

Hundreds of thousands of Zimbabweans have fled abroad in the last 20 years seeking work because of the economic crisis at home.

Many others are now seeking to leave as conditions worsen under President Emmerson Mnangagwa, who had promised an economic revival after he succeeded long-ruling Robert Mugabe in 2017.

Mnangagwa vowed to end the country’s international isolation, attract investors and create growth that could fund the country’s shattered public services.

But the economy has instead declined further, with shop prices rocketing and long power cuts.

The inflation figures came after fuel prices were raised by 16 percent on Saturday.

When Mnangagwa announced a 150 percent fuel price increase in January, it triggered countrywide protests which left at least 17 people dead and scores injured when soldiers opened fire on protesters.

Mnangagwa won disputed elections in July last year, which were also marred by deadly shootings by security forces at protesters.

– Economy on its knees –

The US dollar has been the national currency since 2009 after hyperinflation hit 500 billion percent and the old Zimbabwe dollar was abandoned.

But last month, Zimbabwe in theory ended the use of US dollars and other foreign currencies and replaced them with two local parallel currencies — “bond notes” and electronic RTGS dollars, which would combine to become the new “Zimbabwe dollar”.

The new “Zimbabwe dollar” does not yet exist in paper form.

Unemployment is estimated at over 90 percent and much everyday business has ground to a halt, with many businesses and consumers driven to use the black market.

Bank customers are allowed to withdraw only limited sums, which are dispersed in the little-trusted “bond notes”.

Mnangagwa — Mugabe’s former deputy — has been accused of continuing the state’s violent crackdown on dissent.

At least 21 people have been arrested and charged with treason since January.

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