It has been a challenging month of June for Zimbabweans. The expected cold weather was complimented with harsh economic conditions as attempts to get a hold of both the parallel market exchange rate and inflation failed spectacularly. For June Year on year according to ZimStat’s CPI model was 191.6%. That’s a significant jump from 131.7% the previous month. The month-on-month inflation was no better at 30.7%, the highest it’s been in 23 months. With concrete measures promised this news couldn’t have come at a more important time.
Year on year
We’ve been observing the upward trend in inflation and its acceleration. Just as we put forward towards the 4th quarter of 2021 we are starting to see the growth curve for inflation take an exponential growth shape: increasing at an increasing rate. 191.6% is worrying for many reasons and is an indicator that the parallel market exchange rate, the dominant exchange rate in the informal economy, is nowhere near under control. In simple terms, 191.6% means that you are paying just under 3 times as much for things now as you did this time last year. This is in stark contrast to the efforts of the government when they announced measures to restore confidence just under two months ago. Normally pessimistic analyst expectations were for 175% year-on-year inflation for the month.
Month on month
Month-on-month inflation provided no better reading and this should underscore the state of things. Gone are the days of our “two months up, one month down” trend. We have 3 consecutive months of increase in month-on-month inflation. 30.7% in June 2022 should certainly worry Zimbabweans; we haven’t had a month-on-month inflation figure that high since July 2020; the days of (relative) stability. We’ve only seen 4 months since 2009 with higher month-on-month inflation rates. In the words of Finance Minister Professor Mthuli Ncube, this is the measure of inflation that we should be focused on.
Concrete measures coming
With the last round of measures to restore confidence proving ineffective, Zimbabweans were promised concrete measures to restore confidence on the 25th of June, the day the inflation figures were released by ZimStat. On Sunday the 26th, a press release went out informing the nation of a press conference set for later today to be presented by the Finance Minister Professor Mthuli Ncube and Ministry of Finance Permanent Secretary George Guvamatanga. While the nation waits with bated breath for what the authorities have in store for us Zimbabweans continue to pay alarmingly higher amounts for goods and services.