Zimbabwe annual inflation rate soars to 11.2 mn per cent

HARARE: Zimbabwe's annual inflation rate soared to 11.2 million percent in June, state media reported on Tuesday quoting figures from the central statistical agency.

"Zimbabwe's annual rate of inflation surged in June to 11.2 million percent," The Herald reported. "It gained 9,035,045.5 percentage points from the May rate of 2,233,713.4 percent."

But independent economist John Robertson said the actual figure could be much higher. "The figure which has has been released by the Central Statistics Office is an understatement. The actual figure could be high as 40 million percent in June," he said.

"The actual figure for July can be much high as 300 million percent, while for August it could be 600 million percent," he added.

Once a regional economic model, Zimbabwe is in the throes of economic crisis with an astronomical inflation rate and at least 80 percent of the population living below the poverty threshold, often skipping meals and walking long distances to stretch their income.

Earlier this month, Zimbabwe's central bank chief urged a six-month price and salary freeze in a bid to rein in runaway inflation, with the country in the midst of an economic meltdown.

"Zimbabweans must realise that the country is in a practically binding state of socio-economic emergency," The Herald quoted Reserve Bank governor Gideon Gono as saying then. "As such, there is need for a universal moratorium on all incomes and prices for a minimum period of six months," said Gono.

His proposal came as the bank unveiled on August 1 a new series of bank notes after knocking off 10 zeros from its currency.

Zimbabwe's Kingdom Bank last week reported that the country's hyperinflationary environment had seen yearly inflation of more than 20 million percent although the then last official official figure was 2.2 percent.

The economic meltdown has continued as the country's political situation worsened with a widely condemned single-candidate presidential run-off vote claimed by President Robert Mugabe in June.

Main opposition leader Morgan Tsvangirai withdrew from the re-run poll claiming violence against his suppporters.

Three days of negotiations between the ruling ZANU-PF and two factions of the opposition Movement for Democratic Change (MDC) in Harare and last weekend summit of Southern African leaders failed to bring the parties to a political settlement.

"Investors had pinned their hopes on the outcome of the talks," Kingdom Bank said in a report issued late last week.

It was hoped that the three parties would come together to "map out a lasting recovery plan for the country's economy that has been on a decline for the past 10 years," the bank said.