eBusiness Weekly
Business Writer
Prices of basic goods, groceries in particular, reached unprecedented levels this month as manufacturers and retailers adjusted prices in line with recent depreciation of the Zimbabwe dollar, but March numbers are expected to come out even higher.
Last week this publication carried a story highlighting sharp increases on basic commodities such as roller meal, cooking oil, rice, sugar, salt, flour, bread, milk and eggs among others.
Economist John Robertson, said March figures are “likely to be even wider off the mark when the March figures are published, as the black market rate for converting Zimbabwe dollars into US dollars moved from $27/US$1 to $40/US$1 in the first half of March.”
The currency tumble, analysts say, will see the March inflation figures coming up much higher than the 540,16 percent year-on-year for the month of February. Month-on-month February inflation stood at 13,52 percent.
Food, which constitutes 30,34 percent of the total basket, saw prices increase by as much as 716,4 percent over 12 months with bread inflation topping 784,45 percent, meat at 621,12 percent and Milk, Cheese, Eggs at 668.42 percent.
Clothing, with a 3,41 percent weight recorded prices increases of 588,09 percent. Passenger transport services, used by many of the country’s workforce saw fares increase by as much as 547,9 percent in February.
At least 12 of the 83 goods and services bought by households, recorded price increases over more than 1 000 percent, but these account for only 8,03 percent of total consumer spending.
The list includes pharmaceutical products with inflation hitting 1 252 percent. Telephone and telfax services had inflation at 1 015 percent, while car insurance premiums increased by 1 902 percent.
The data on prices for the month of February was collected during the period from 12 to 18 February when the parallel market Zimbabwe dollar to the US dollar exchange rate ranged between 27 and 29.
If similar dates (between 12 and 18) were used to collect data for the month of March 2020, the parallel market exchange rate, used by many to determine prices, would be between 41 and 44.
The sharp drop in the exchange rate resulted in unprecedented price increases, threatening Government’s projection that inflation will close the year at approximately 50 percent.
With the COVID-19 pandemic likely to affect movement of products, some retailers could take advantage and push prices further with the impact likely to be felt when the April numbers are released.
Zimbabwe is battling to stabilise both prices and the exchange rate, with Finance Minister Mthuli Ncube recently putting in place a Currency Stabilisation Task Force that he will chair.
The task force will meet at least once a week to review the conditions in the markets, monitor the behaviour of key variables such as the exchange rate and inflation, and to ensure that the measures that are put in place are expeditiously implemented.
