Wednesday, February 14, 2007

Huge price increases for bread, electricity and meat drove Zimbabwe's annual inflation rate to 1,593.6%

Associated Press:

The figure for January 2007 represents a 312.5 percent increase on the December rate, the biggest leap in 17 months. Economists have said there could be hourly price increases in stores by May or June, the Zimbabwe Independent newspaper reported last week.

Zimbabwe has seen runaway inflation for five years since President Robert Mugabe began seizing thousands of white-owned commercial farms for redistribution to blacks.

Agricultural production - once Zimbabwe's economic backbone - has dropped 40 percent, and foreign investors have fled as dozens of companies have been forced to close. Unemployment is now more than 70 percent.

The Zimbabwean dollar has plummeted in value in recent weeks, trading now at around 9,550 to the $1 on the widely used parallel market, more than 38 times the official 250:1 rate set by the Reserve Bank of Zimbabwe.

Consumers struggle to keep up with daily price changes for goods, while the government accuses businesses of sabotaging the economy by adjusting prices.

"The month-on-month rate of inflation is now 45.4 percent, following steep increases in rentals and the prices of bread and cereals," the statistics office said in the state-controlled Herald newspaper.

Central bank governor Gideon Gono this month proposed a four-month price and wage freeze starting March 1, but there was little sign that businesses and workers would heed his call.

The Central Statistics Office said that the cost of living had increased by 64.53 percent from December 2006.

A wave of discontent is sweeping through the public sector. For seven weeks, nurses and doctors have been on strike at four hospitals in the capital, Harare, and in Bulawayo.

A civil servants' union this weekend gave the government until Friday to agree to a 400 percent wage hike for its 180,000 members or face unspecified "action."

Surviving Zimbabwe's runaway inflation

More white Zimbabwean farmers expelled

Socialist-Created Misery Consumes Zimbabwe

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