We have been expecting this for a while and the trend was undeniable but confirmation always makes the point. Life is getting more expensive for Zimbabweans; you don’t need anyone to tell you that. How expensive? Well, when we say year on year inflation is 100% it simply means citizens are paying twice as much for things as they paid 12 months ago. Zimbabwe’s year on year Inflation according to ZimStat stood at 131.7%, which means we are paying double plus what we paid just 12 months ago. When Finance minister Professor Mthuli Ncube took inflation to task he said we should rather look at month on month inflation than year on year as it contained more relevant data. Month on Month inflation for May was 21%, the highest it has been in 24 months. As inflation heads back to uncomfortably familiar territory there are many reasons to be worried.
Year on year
The year on year picture says it all. We’ve been here before and not too long ago either. To put 131.7% year on year inflation in perspective consider that it is more than double the 50.24% that was recorded in August 2021, our most recent low. So prices are accelerating at more than twice as fast as they did just under a year ago. Many reasons for this outrageous inflation have been cited including the continuing fall out of the Russia-Ukraine crisis and the stress it has put on supply chains, which to be fair were already under pressure and recovering from the pandemic that continues to outlive all initial forecasts of how long it would be with us. Domestic efforts to tame inflation have far not realised any success despite authorities coming out in full force with measures and rule changes left, right and centre.
Month on Month
If you thought the year on year picture was bad then the month on month picture will be downright horrific. As people who have dealt with figures in the thousands, millions, billions, trillions, quadrillions, quintillions and even sextillions a little over 10 years ago Zimbabweans are somewhat desensitised to the meaning of big numbers. This is understandable. 21% month on month inflation is significantly higher than our year on year inflation of 131.7%. If you maintained 21% month on month inflation you would have prices double in 4 months! And it should go without saying that if the inflation rate gets any higher that period shortens. The last time we had month on month inflation figures in or above that level was July 2020. 21% month on month inflation annualised is 849.73%… If you’ve been following inflation trends in Zimbabwe this figure will be oddly familiar to you. That is the peak of our post dollarisation inflation.
The most recent raft of measures and adjustments to them has certainly not had an instant impact. Generally speaking, where the government has succeeded with policy there has been some early impact so the signs do not look good. The wise and prudent Zimbabwean would look to the past to prepare for the future.