/ 27 November 2007

Zim inflation figures affected by shortages

Zimbabwe’s latest inflation figures have been delayed because there are not enough goods in the shops by which to measure price increases, the state statistical department said on Tuesday.

There was an ”unavailability of required information, such as prices of goods, due to their shortage on the formal market”, the government mouthpiece Herald newspaper quoted Moffat Nyoni, director of the Central Statistical Office (CSO), as saying.

”There are too many data gaps,” said Nyoni. ”We went to too many shops to observe and so compilations have not been completed.”

Some of the items in the office’s basket of goods used to measure inflation ”were not available”, he said.

The CSO was ”trying to find ways of coming up with the missing figures”.

Monthly inflation data, eagerly awaited in the Southern African country of world-record inflation, is usually issued in the second week of each month, but Tuesday’s announcement broke a two-week silence from the office.

Reports in the independent press said that the figure for annual inflation in October shot to a new record of 14 840%, against the officially announced figure of 8 000% in September.

Zimbabwe has been in the grip of an exponentially worsening economic crisis since 2000 with the currency also collapsing.

Goods in the country’s normally well-stocked supermarkets and shops suddenly disappeared in July after President Robert Mugabe’s government forced businesses to slash the prices of their goods to well below what it cost to procure them.

Thousands of businesspeople were arrested for ”overcharging” while hordes of people, led by police, soldiers, state intelligence agents and price inspectors themselves, looted goods at officially enforced rock-bottom prices.

A second price blitz was set to begin last week, but the government backtracked at the last moment after warnings of a total shutdown of business.

Twice before this year the government has blocked the issue of inflation statistics after the figures rose sharply and contradicted the regime’s claim that it was beating inflation.

Economists have for years been warning that runaway inflation is the consequence of the government’s reckless economic policies, including unrestrained printing of money and excessive state spending.

‘Useless manure’

Last week it was reported that Zimbabwe was preparing to slash three more zeros from its currency for the second time in a year, as inflation soars in the crippled economy.

Central bank Governor Gideon Gono said after months of planning, the issue of new currency bills was ”imminent”, state television and radio reported.

The television showed a sample of a new Z$500 note.

The highest existing bill for Z$200 000 becomes Z$200.

”I know the zeros we removed last time came back quickly but this time we are doing it in such a way they will not return,” Gono told a televised meeting of banking and business leaders. He did not elaborate.

Zimbabwe has suffered chronic shortages of local cash this month, which created long lines at banks and ATMs not shut down by the daily power failures.

Gono accused speculators of hoarding cash, saying the new denominations would replace the old in a changeover lasting a day or two.

He said holders of cash needed to urgently deposit it into the formal banking system ”before it turns to useless manure”. Banks and finance houses were asked to extend their business hours to accommodate depositors. — Sapa-dpa, AP