The inflation figure for the month of June 2019 once again broke post dollarisation records coming in at 175.6%. This marks the 12th consecutive month of inflation growth in the nation. Maintaining Zimbabwe’s inflation position as the highest in the continent and the second highest in the world. The latest development should really put into perspective just how much and what kind of progress our policies are making.
But didn’t prices go down?
The inflation figure is reported with a 15-day lag, that is to say, the data is for the month gone, in this case, June not the current month of July. With the announcement on currency policy changes only happening on the 24 of June and an immediate price jump thereafter the effects of the policy will not be included in the inflation report for June 2019. That said the movement of rates since the early reaction to SI 142 of 2019 may not give much change going forward as they have overall shown an upward trend in the exchange rate.
While the Housing utility inflation weighed down the average moving up only 19%, food inflation led the surge with an increase in CPI from the previous 126.30 to 252.10 points this month. Food prices have basically doubled in the previous month. Transport inflation meanwhile went up from 106.60 to 123.80 CPI points. Transport has long been one of the more sober performers. This reflects the true pricing structure now in place.
On a month-on-month basis we have stepped up to 39.26% up from 12.54% in the previous month and this is a more worrying picture. Academic debate about whether or not we are in hyperinflation will surely be over by the next month unless something changes. The academic mark for hyperinflation is 50% per month. The 2019 trajectory has been upward for the month on month inflation growing exponentially.
The inflation data for July expected to be announced a month from now will be crucial in determining just how effective Statutory Instrument 142 of 2019 has been in slowing down inflation. That is the month that Finance Minister Mthuli Ncube earmarked as the month prices would start to decline. Statistics like this are only to preaching to the choir for those living on the ground as people experience these increases in their day to day lives.