BY SHARON BUWERIMWE
ZIMBABWE continues to make global headlines after the country’s inflation rate was ranked as one of the highest in the world alongside war-torn countries such as Syria, according to international economist Steve Hanke.
Hanke said the country’s inflation rate stood at 244%, a day after the Zimbabwe National Statistics Agency (ZimStat) said the inflation rate rose to 131,7 % from 96,4 % in April.
“In this week’s inflation table, Zimbabwe takes first price. The Zimbabwe dollar has depreciated against the US dollar by 94,53% since January 2020. Zimbabwe must dump the Zimbabwean dollar and officially adopt the US$,” Hanke said.
Other countries with high inflation rates include Venezuela (1 198%), Sudan (340%) and Lebanon (201%)
Local economists, who spoke to NewsDay, said inflation figures provided by ZimStat could be understated because they were based on the formal economy.
Economist Prosper Chitambara said: “They (inflation numbers) don’t fully reflect what’s happening in the informal economy since our economy is now largely informal. So when measuring inflation using the formal economy then you are likely to come up with an inaccurate picture.”
However, Chitambara agreed with another economist Eddie Cross that the difference between Hanke’s inflation rate and ZimStat’s was due to different methods used to calculate the
Cross said: “It depends on how you calculate this inflation. Steve Hankes used indicators which are provided in the financial market. The parallel market rate is the biggest driver of inflation.”