Zimbabwe inflation passes 100,000%, officials say

A February 22, 2008 article by Associate Press writer Angus Shaw highlighted the hyperinflation in Zimbabwe:

The official rate of annual inflation in Zimbabwe has rocketed past the 100,000% barrier, by far the highest in the world, the state central statistical office said yesterday. Second-placed Iraq has inflation of 60%, according to international estimates.

In a brief statement, the statistics office said inflation rose to 100,580% in January, up from 66,212% in December.

The new official figure was still well below the rate calculated by independent analysts. They estimate the real inflation is closer to 150,000%, citing supermarket receipts showing that the price of chicken rose more than 236,000% to 15m Zimbabwe dollars a kilogram between January 2007 and January 2008. Slower increases in prices of sugar, tea and other basics bring down the average to around 150,000%.

Zimbabwe, a former regional breadbasket, is facing acute shortages of food, hard currency, gasoline and most basic goods in an economic meltdown blamed on disruptions in the agriculture-based economy after the seizures of thousands of white-owned commercial farms began in 2000, accompanied by political violence and turmoil.

Economic hardship is a key issue in national elections scheduled for March 29 in which President Robert Mugabe, who turns 84 on Friday, is facing the biggest challenge to his hold on power since he led the nation to independence in 1980.

Inflation, food shortages and the crumbling of power, water, sanitation, roads, phones and communications and other utilities have fuelled deep divisions in the ruling Zanu-PF party.

In early October the state central statistical office gave official inflation at just below 8,000%. It then suspended its monthly updates because there was not enough in the shortage-stricken shops to calculate a regular basket of goods.

November's already dizzying rate of 24,470% was announced in January and earlier this month the official rate for December was given as 66,212%, a dramatic escalation in the space of a month.

The National Incomes and Prices Commission, the government's price control body, this month allowed sharp increases in the prices of the corn meal staple, sugar, bread and other basics in a bid to restore viable operations by producers and return the goods to empty shelves.

But the new prices were still roughly half the price demanded on the black market and were unlikely to guarantee regular supplies to food stores.

Executives at a milling company producing corn meal said the price increase allowed by the government was already overtaken by soaring production costs and gasoline prices and the National Bakers Association said bread shortages were set to worsen unless the price of a loaf was nearly doubled to more than 5m Zimbabwe dollars for a regular loaf.

Gross domestic product in Zimbabwe fell from about $200 in 1996 to about $9 a head last year.