Zimbabwe on edge as inflation hits 1,000%
Zimbabwe, in its eighth year of recession, has the fastest shrinking economy of a country outside a war zone, according to the World Bank, and the highest inflation rate in the world.
The official statistics agency said yesterday the annual inflation rate hit a record 1,042.9 percent in April after rising 913.6 per cent in March.
"As expected, it's more doom and gloom," said John Robertson, a private economic consultant. "How do you start to explain a situation where you wake up to a new price almost every day? Many families are barely getting by; they are in a survival mode," he said.
Analysts say the president has dented Zimbabwe's investment image with his seizure of white-owned farms for blacks, and that government plans to acquire a 51 per cent stake in all foreign-owned mines will keep external funding at bay.
That has undermined the currency, fuelling an inflationary spiral which shows no sign of abating. Economists say the inflation rate could end the year at around 1,800 per cent.
Some shops no longer put prices on commodities, saving themselves the trouble of changing them every day. With a carton of orange juice costing 500,000 Zimbabwe dollars (2.70) and a kilo of beef up to a million dollars, people carry their money in large bags even for simple shopping trips.
Analysts say most Zimbabweans are cutting down on basic necessities, with some families living on one meal a day.
"There is a lot of anger over the economic hardships, and if you combine this with the political conditions, we have an explosive social environment," said Eldred Masunungure, from the political science department at the University of Zimbabwe.
"We are right on the edge, and, politically, what is going to be interesting is how the government and the opposition are going to play the game."
The main opposition party, the Movement for Democratic Change (MDC) says it is organising peaceful anti-government marches to protest at Mr Mugabe's policies.
Mr Mugabe has warned MDC leader Morgan Tsvangirai that he would be "dicing with death" if he tried to force a coup.
Mr Mugabe, 82, in power since independence from Britain in 1980, has used tough security laws to curb protests and says the economy is a victim of sabotage by opponents of his seizures and land redistribution.
Critics blame the land reform programme for a 60 per cent drop in agricultural output since 2000, leading to a 35 per cent fall in gross domestic product.
In the first major violent protests over a sharp rise in college fees, police said students burned down a computer laboratory and classroom block at Bindura University in north-east Zimbabwe.
Mr Mugabe put his security services on high alert early this year over fears that bitter wage disputes, and school and consumer price rises amid the deepening economic crisis might spark demonstrations.
And in a measure clearly aimed at forestalling protests against his ruling ZANU-PF party, Mr Mugabe recently awarded civil servants, including security forces, a 300 per cent pay rise.