Zimbabweans queue outside a bank in Harare, Zimbabwe, February 26 2019. Picture: REUTERS/PHILIMON BULAWAYO
Zimbabwe’s year-on-year inflation reached 97.85% in May, latest statistics from the Zimbabwe Statistical Agency (Zimstat) revealed on Monday.
The annual inflation rate jumped steeply from 75.86% the previous month, showing how the country’s economic meltdown continues to escalate.
Zimbabwe, whose inflation rate is widely ranked as the second highest in the world after Venezuela, is experiencing its worst economic challenges with price increases at a 10-year high.
At the height of the financial crisis in 2008 Zimbabwe’s inflation skyrocketed to more than 89-sextillion. In response, the government printed its highest denomination of $100-trillion.
The beleaguered Zanu-PF government then dropped the Zimbabwean dollar and adopted the US dollar. It later extended this to a basket of currencies that included the rand, sterling, the yen and other foreign currencies.
In a statement seen by Business Day, Zimstat said that year-on-year food and nonalcoholic beverages inflation, stood at 126.43%, while the nonfood inflation rate was 85.94% .
“The month-on-month food and nonalcoholic beverages inflation rate stood at 17.63% in May 2019, gaining 9.78 percentage points on the April 2019 rate of 7.85%.
“The month-on-month nonfood inflation rate stood at 10.12% , gaining 5.67 percentage points on the April 2019 rate of 4.45%.”
Economists says real inflation could be much higher owing to the recent spate of price increases. Retailers have hiked commodities daily to keep up with the falling rate of the local currency to the US dollar.
Price increases have caused untold suffering to ordinary Zimbabweans whose wages remain stagnant despite the economic turmoil.
The Health Apex Council, which represents the bulk of the country’s doctors, nurses and other health sector unions, announced at the weekend that it would embark on a limited strike starting on June 17. It will be escalated if the Harare government does not meet their demands.
The teachers’ unions wrote to MPs and President Emmerson Mnangagwa last week, warning of strikes unless the government paid them inflation-related salaries.
The IMF has predicted that the Southern African country’s economy will contract by 2,1% owing to macroeconomic imbalances and a poor farming season.
Zimbabwe is also plagued by shortages of foreign currency, electricity, medicines and fuel.