A loaf hits £78 as Zimbabwe's inflation rate soars to 66,000%

Published on Thursday 14 February 2008 21:08

ZIMBABWE'S normally bare shop shelves were brimming with Valentine's Day cards yesterday, but there was bad news on the economic front: annual inflation has soared to more than 66,000 per cent.

The state Central Statistical Office has admitted that inflation for last December stood at a staggering 66,212.3 per cent.

Eight years of economic turmoil mean most Zimbabweans are unmoved by new inflation figures. But the latest figure represents a huge jump of more than 39,714 percentage points on the November rate.

Economists say the month-on-month inflation rate must top 50 per cent for three consecutive months before it can be called hyperinflation. Zimbabwe's month-on-month rate has topped 130 per cent every month since October, according to a local economist.

Robert Mugabe, the longtime president, tipped Zimbabwe's once-prosperous economy into crisis at the turn of the century, forking out huge, unbudgeted pay-outs to war veterans and then ordering the takeover of more than 4,000 white commercial farms.

Some 80 per cent of Zimbabweans live below the poverty line. Food shortages are worsening. Up to four million people will need food aid by elections on 29 March, agencies say.

The inflation rate for food and non-alcoholic beverages is 79,412 per cent, much higher than for non-food items. In a last-ditch attempt to cap the rampant inflation, Mr Mugabe launched controversial price cuts in August.

Police and price inspectors were deployed in supermarkets where tellers were ordered to reduce prices, often by much more than the 50 per cent stipulated by the president.

The blitz backfired, emptying stores. Now most basics are only available on the pavements and from cross-border traders at prices beyond the pockets of most.

This week, the cost of bread shot up from Z$2.5 million (42) per loaf to Z$4.5 million (78). The lowest-paid worker for the state water authority gets just Z$34 million a month.

Mr Mugabe, who is 84 next week, refuses to accept responsibility. He blames inflation on Western sanctions and greedy businessmen he claims are working in cahoots with the main opposition, the Movement for Democratic Change.