Thursday, July 18, 2024

Zimbabwe: Inflation Hits 175% As Currency Continues Crashing Against US Dollar

Harare, Zimbabwe — Zimbabwe officials say the country’s annual inflation rate more than doubled from May to June, to more than 175%. Economists say multiple devaluations of Zimbabwe’s struggling dollar led prices to surge.

Average Zimbabweans are feeling the effects of the country’s weak currency, known as bond notes or ZWL, which has been losing value against the U.S. dollar.

Forty-year-old Kathleen Maswera said her salary in local currency has lost about 70% of its value since the beginning of the year. She has been begging her employer to adjust her pay.

“So, it’s very difficult. Everything is going up, you get into the shop the next time the rate has changed, everything has changed, so it’s tough,” she said. “I take care of school going children, I also take care of my niece, who is not employed right now. So, it’s very tough. I have to work on contracts, all the money that I work is from hand to mouth. So, it’s quite difficult at the moment.”

Taguma Mahonde, the director-general of the Zimbabwe National Statistics Agency, said the country’s inflation rate remains high and accelerated this month.

“The month-on-month inflation rate in June 2023 was 74.5%, gaining 58.8 percentage points on the May 2023 rate of 15.7%, he said. “The year-on-year inflation rate for the month of June 2023 as measured by the all-items Consumer Price Index was 175.8%.”

Trust Chikohora, a businessman and economic commentator, as well as former president of Zimbabwe National Chamber of Commerce, said the rising inflation number are because of the local currency, which has been losing value against the U.S. dollar, forcing prices to go up.

On a positive note, he said the inflation rate may soon start heading down.

“Maybe it will start to even out as we move forward in July and beyond, especially if the government continues to move with measures they have been putting in place now,” he said. “That’s to minimize activity on the parallel market, to have [a] situation where interest rates are higher than inflation, money supply growth needs to be curtailed so that government is not pumping Zim dollar money into the market.”

That would be surely good news for average Zimbabweans whose wages can’t keep up with the rising prices at the market.


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