Zim’s yearly inflation shoots to  176%, more than doubles in a month

By Alois Vinga

ZIMBABWE’s annual inflation shot to 176% in the period of June 2023, more than doubling the  rates recorded last month, Zimbabwe National Statistics Agency (ZIMSTAT) reported Monday.

The developments come on the back of a waning ZW$ which has lost much of its value on both the official and parallel markets and is currently trading at US$1:ZW$7 500 .

Inflation rates movements in Zimbabwe are normally affected by the US$ exchange rates since most prices are indexed against the greenback.

Following the recent waves of exchange rate depreciation recently, both monthly and yearly inflation levels have responded accordingly.

“The year-on-year inflation rate  for the month of June 2023 as measured by the all items Consumer Price Index (CPI) was 175,8%.This means that prices as measured by the all items CPI increased accordingly between June 2022 and June 2023.

“The month-on-month inflation rate in June 2023 was 74,5% gaining 58,8% on the May 2023 rate of 15,7%,” said Zimstat.

The statistics organ said month-on-month Food and Non-Alcoholic Beverages inflation rate was at 104,2%  in June 2023, gaining 78,3% on the May 2023 rate of 25,9%.

The food poverty line (FPL) for the month under review was $69,941.05, reflecting the minimum needs basket cost for one person, representing  an increase of 132,3% to the figure of $30,108.94

“The Total Consumption Poverty Line (TCPL) for Zimbabwe stood at $91,171.62 per person in June 2023. This means that an individual required that much to purchase both non-food and food items as at June 2023 in order not to be deemed poor.

“This represents an increase of 128.3%  when compared to the April 2023 figure of $39,927.46,” said Zimstat.

However, the local currency has begun to show signs of recovery after registering slight depreciation on both markets in the last fortnight which comes on the back of far reaching measures employed by the government to save the waning local currency.

Last month, the Treasury announced two sets of measures which include a commitment to fund 25% export surrender requirement, maintaining US$ cash withdrawal tax at 2%, adoption of all external loans by RBZ and increasing consumers’ access to basic commodities – by lifting import restrictions on basic goods.

The Dutch Foreign Currency Auction was also liberated  further by allowing the market to determine the exchange rates through the Willing Buyer Willing Seller (WBWS) system where banks receive foreign currency from the central bank at a wholesale floor price for onward sales  to their clients.