By Business Reporter-Zimbabweans should prepare for a bleak Christmas as inflation drives prices of basic goods beyond reach, a direct consequence of the collapsing Zimbabwe Gold (ZiG) currency.
The Zimbabwe National Statistics Agency (ZIMSTAT) reported a sharp increase in inflation on Friday, with October’s month-on-month rate spiking to 37.2%.
This surge has weakened household purchasing power, with the ZiG currency rapidly depreciating in value.
October’s inflation spike follows the Reserve Bank of Zimbabwe’s (RBZ) 43% devaluation of the ZiG in September, an attempt to stabilize the official exchange rate and ease demand for the US dollar.
Instead, the devaluation intensified inflation, affecting prices across all sectors and reviving fears of a return to the hyperinflation era of the early 2000s.
Presenting the latest data, ZIMSTAT Prices Statistics Manager Thomas Chikadaya noted, “The month-on-month inflation rate was 37.2 percent in October 2024, gaining 31.4 percentage points from the September rate of 5.8 percent.
This means that prices, as measured by the all-items ZWG CPI, increased by an average of 37.2 percent between September and October 2024.”
While the RBZ’s devaluation sought to strengthen economic stability, it has only deepened Zimbabwe’s economic crisis, which stems from years of hyperinflation, devaluation, and failed currency experiments.
The RBZ’s latest interventions, designed to control foreign exchange pressures, have brought minimal relief.
The official exchange rate currently stands at US$1: ZiG27.7, while the parallel market hovers around US$1: ZiG35, highlighting the gap between market realities and government controls.
Despite government claims of stability, prices of essential items continue to escalate.
This publication’s recent price monitoring survey revealed that a standard loaf of bread now costs ZiG28.50 (around US$1.15), a 20kg bag of mealie meal averages ZiG250 (about US$10), and other staples such as rice and washing powder are also rising steadily.
The government has projected a “modicum of stability” in prices through year-end, but economists warn that this stability remains tenuous.
Economist and RBZ Monitoring Policy Committee member Persistence Gwanyanya noted, “While we have seen some stabilization due to tightened liquidity conditions, the parallel market remains active, posing ongoing risks to price stability.”
As inflationary pressures mount, Zimbabwe faces the challenge of regaining control over its currency and the cost of living.
For ordinary citizens, however, the immediate outlook is dim: another festive season marred by skyrocketing prices and eroding purchasing power.