Inflation hits record high

The price of goods and services in Zimbabwe rose by at least 47 percent last month - the highest increase ever recorded in the country, according to the Central Statistical Office (CSO). Low-income families were experiencing "difficult times, as shortages of basic commodities continue and price adjustments occur daily", the Consumer Council of Zimbabwe (CCZ) reported. Inflation reached 164.3 percent at the end of June, and last month's record hike drove the annual rate to its current 254.8 percent. Economist John Robertson explained that "the increase in prices of goods and services has been driven by the scarcity of foreign exchange". The official Herald newspaper observed that the increase "makes it mathematically impossible" for Zimbabwe to achieve the target of 80 percent year-on-year inflation by the end of 2005, set by Reserve Bank Governor Gideon Gono. Acting CSO director Moffat Nyoni was quoted by the newspaper as attributing the latest rise partly to the Reserve Bank, which had reset exchange rates. "If the exchange rate had been allowed to fall in line with inflation, monthly [inflation] figures would have been higher over the last year, but last month's figure would have been lower," reported the Herald. According to Robertson, the biggest increases were recorded in school fees, which soared by 1,263.6 percent, and rent, which climbed by 157.3 percent. The annual inflation rate for food and non-alcoholic beverages was 226 percent, while for non-food items it was 273.9 percent. From US $227 in June the expenditure basket for a family of six had shot up by at least $135 to $362 in July, the consumer council noted. "The increase was largely propelled by ... both food and non-food items, following last month's increase in fuel prices and the devaluation of the local currency". Teachers generally earn $648 a month, while domestic workers get an average monthly wage of $21. The CCZ said the price rises could also be partly attributed to the "prevalence of the black market, which gives ready access to commodities such as sugar, cooking oil, mealie-meal, flour, soap and fuel, which have disappeared off the formal market."