|The ZIMBABWE Situation||Our
thoughts and prayers are with Zimbabwe |
- may peace, truth and justice prevail.
The inflation rate, or consumer price index (CPI), rose 113.3% in the year to March, a slight slowdown on 116.3% in February, the Central Statistical Office (CSO) said.
A domestic worker or industrial worker will be earning less than Z$10,000 a month. It's very difficult to understand how they pay their living expenses
Professor Rob Davies
University of Zimbabwe
"We don't have inflation rates for low income and high income groups but my impression is income distribution is getting worse, that the rich are getting richer and the poor are getting poorer," Professor Rob Davies, chairman of the economics department at the University of Zimbabwe told the BBC's World Business Report.
Month-on-month, inflation increased 6.4% compared with 4.7% in February, indicating an upward trend.
The data shows President Robert Mugabe has a formidable task of turning the economy around after being re-elected in last month's controversial poll.
Zimbabwe is in its fourth year of recession, its worst economic crisis since independence from Britain in 1980.
Its economy is expected to shrink by 12% this year, following Mr Mugabe's election victory, after a 7.5% contraction last year.
The government re-introduced price controls on basic consumer items last October to rein-in soaring inflation.
The controls created artificial shortages of commodities, about 80% of which are now estimated to be sold on the black market at exorbitant prices.
"I'm not sure what solution I'd have (for the inflation rate) but it does require the government to look at their borrowing on the domestic market, look at money supply growth, and bring this down," said Professor Davies.
"Devaluation won't solve the problem, but it is a necessary part of the package," he said.
But with rampant inflation, it is unlikely the government will devalue the currency to bring prices in line with the black market.
The Zimbabwean dollar has been fixed at 55 to the US dollar since November 2000, but is trading at between 300 and 345 on the black market.