Zimbabwe inflation surges to 7,634%

Official inflation in Zimbabwe, which has the world’s most inflationary economy, surged by 2,000 points to an annual rate of 7,634 percent in July.

Most of the nation’s neighbours in southern Africa have single digit inflation.

The state Central Statistical Office said in a statement that a government order to reduce prices in late June, which has left shelves bare of staple goods across the country, brought the month-on-month inflation down from 86% in June to 31% in July.

The price cuts of about half on all goods and services have led to acute shortages of fuel, cornmeal, meat, bread and other staples and spurred illegal black market deals on scarce items.

Black market traders charge at least four times fixed government prices and their activities are not factored into official inflation figures. Cooking oil, soap, sugar and even cigarettes, tea and coffee beans are generally only available on the black market.

Independent estimates put real inflation across the board closer to 20,000% and the International Monetary Fund has forecast it reaching 100,000% by the end of the year.

The government today announced adjustments upward on its fixed prices for a few basic foodstuffs as well as telephone calls and air fares.

Mobile phone charges, slashed in June, went up about ten-fold today, the Industry Ministry announced.

The June reduction in all call charges has led to the virtual collapse of phone services through overloading and congestion, but network operators said the new mobile charges were still “ridiculously cheap” and uneconomic at less than a single US or euro cent a minute.

Last week, the government raised the price of bread and meat by up to 30%, but supplies have not improved.

At least 7,000 business executives, managers, traders and bus drivers have been arrested and most have been fined for overcharging since the price edict of June 26. Producers argue they are being told to sell their goods at below the production cost.

Officials at the state statistics office said in May they were ordered not to release further inflation data.

Banks and finance houses, however, demanded the latest update needed for routine calculations and transactions, management planning and to meet provisions of corporate laws.