OMEN
05-12-2006, 08:34 PM
Zimbabwe's inflation rate, the highest in the world, soared above 1,000 percent for the first time last month, the Central Statistics Office said.
Inflation accelerated to a record 1,043 percent from 914 percent in March, the Harare-based statistics office said in an email. Prices rose 21 percent in the month.
Zimbabwe's inflation has accelerated this year after the currency plunged, pushing up import costs, and the government printed money to pay debt and salaries. The central bank raised its key lending rate by 50 percentage points to 800 percent on April 25
in a bid to slow inflation, which the bank forecast would fall to
between 220 percent and 230 percent by the end of the year.
"We are worried about the trend in inflation, which is onwards and upwards,'' Fungai Tarirah, an analyst at Imara Asset Management's Zimbabwe unit, said by telephone from Harare. "It makes this a more difficult operating environment. There's morepressure on the currency and exporters are less viable.''
The Zimbabwean dollar trades at about 200 000 to the US dollar on the black market, said Tarirah, compared with the official rate of 101 195.
Zimbabwe's economy will probably contract 4.7 percent this year, after shrinking 6.5 percent last year, the International Monetary Fund said on April 19. The economy, once southern Africa's
second-largest, has shrunk every year since 2000 when President
Robert Mugabe began seizing white-owned commercial farms, slashing agricultural production.
Government spending was helping to push up inflation, with the
budget deficit, including "quasi-fiscal activities'' of the central bank, rising to almost 60 percent of gross domestic product last year from 27 percent in 2004, the IMF said on February 23.
Bloomberg.
Inflation accelerated to a record 1,043 percent from 914 percent in March, the Harare-based statistics office said in an email. Prices rose 21 percent in the month.
Zimbabwe's inflation has accelerated this year after the currency plunged, pushing up import costs, and the government printed money to pay debt and salaries. The central bank raised its key lending rate by 50 percentage points to 800 percent on April 25
in a bid to slow inflation, which the bank forecast would fall to
between 220 percent and 230 percent by the end of the year.
"We are worried about the trend in inflation, which is onwards and upwards,'' Fungai Tarirah, an analyst at Imara Asset Management's Zimbabwe unit, said by telephone from Harare. "It makes this a more difficult operating environment. There's morepressure on the currency and exporters are less viable.''
The Zimbabwean dollar trades at about 200 000 to the US dollar on the black market, said Tarirah, compared with the official rate of 101 195.
Zimbabwe's economy will probably contract 4.7 percent this year, after shrinking 6.5 percent last year, the International Monetary Fund said on April 19. The economy, once southern Africa's
second-largest, has shrunk every year since 2000 when President
Robert Mugabe began seizing white-owned commercial farms, slashing agricultural production.
Government spending was helping to push up inflation, with the
budget deficit, including "quasi-fiscal activities'' of the central bank, rising to almost 60 percent of gross domestic product last year from 27 percent in 2004, the IMF said on February 23.
Bloomberg.