Inflation hits new high as Zimbabwe's economy implodes

Zimbabwe's inflation, already the highest in the world, hit a new record of 1,193.5% for the year to May, the government’s Central Statistical Office said today.

Massive surges of up to 11,000% in medical expenses and 5,000% in postal fees contributed to the figure, along with steep increases for transport, water and electricity, office director Moffat Nyoni told state-run radio.

Zimbabwe’s economy has collapsed since the government began seizing thousands of white-owned commercial farms for redistribution to blacks in 2000 – an often-violent campaign that has crippled the key agriculture sector. The country has also suffered years of drought.

Independent economist John Robertson said the 28% increase in inflation since April was “higher than my most pessimistic forecast,” contradicting government claims that good rains and a predicted “bumper harvest” would help rein in price increases.

“They have none of the answers, and none of the hoped-for improvements are showing through,” he said. “I fear it will be 2,000% by the end of the year.”

Production of Zimbabwe’s main foreign currency earner, tobacco, has dropped 75% since the start of the aggressive land reform programme. All economic sectors have also been hit by political turbulence and lack of vital inputs.

Unemployment is estimated at 80%, fuelling an exodus of some 4 million of Zimbabwe’s 16 million people in search of jobs in neighbouring African countries, Europe and North America.

A so-called slum eradication campaign last year destroyed the homes, livelihoods or both of some of Zimbabwe’s poorest residents.

The cost of a loaf of bread has surged to 120,000 Zimbabwe dollars (93c) on the black market; it is no longer obtainable at the government-controlled price of 80,000 Zimbabwe dollars (63c).

The surge in health service costs hits particularly hard in a country where at least 3,000 die every week from Aids-related diseases, according to government estimates.

Health Minister David Parirenyatwa said Wednesday that state hospitals were “in disarray” due to lack of staff, equipment and drugs. Private doctors charge four million Zimbabwe dollars (€31) for a consultation – more than many Zimbabweans earn in a month.