Inflation rate surpasses 100,000 percent

HARARE, Zimbabwe (AP) — The official rate of annual inflation in Zimbabwe has rocketed past the 100,000 percent barrier — by far the highest in the world — the state central statistical office said yesterday. Second-placed Iraq has inflation of just 60 percent, according to international estimates.

In a brief statement, the statistics office said inflation rose to 100,580 percent in January, up from 66,212 percent in December. A further breakdown of its calculations will be released later, officials said.

The new official figure is still well below the rate calculated by independent analysts. They estimate the real inflation is closer to 150,000 percent, citing supermarket receipts showing the price of chicken rose more than 236,000 percent to 15 million Zimbabwe dollars, or about $2.15, per kilogram (2.2 pounds) between January 2007 and January 2008. Slower increases in prices of sugar, tea and other basics brought down the overall average inflation.

Zimbabwe, a former regional breadbasket, is facing acute shortages of food, hard currency, gasoline and most basic goods in an economic meltdown blamed on disruptions in the agriculture-based economy after the often-violent seizures of thousands of white-owned commercial farms began in 2000. These events were also accompanied by political violence and turmoil.

Economic hardship is a key issue in national elections scheduled for March 29 in which President Robert Mugabe, who turns 84 today, is facing the biggest challenge to his hold on power since he led the nation to independence in 1980.

Inflation, food shortages and the crumbling of power, water, sanitation, roads, phones and communications and other utilities have fueled deep divisions in the ruling Zimbabwe African National Union-Patriotic Front party (ZANU-PF).

In early October, the state central statistical office gave official inflation at just below 8,000 percent. It then suspended its monthly updates on inflation because there was not enough in the shortage-stricken shops to calculate a regular basket of goods.

November’s already dizzying rate of 24,470 percent was announced in January and earlier this month the official rate for December was given as 66,212 percent — a dramatic escalation in the space of a month.

The National Incomes and Prices Commission, the government’s price control body, this month allowed sharp increases in the prices of the corn meal staple, sugar, bread and other basics in a bid to restore viable operations by producers and return the goods to empty shelves.

Executives at a milling company that produces corn meal said the price increase allowed by the government was already overtaken by soaring production costs and gas prices. The National Bakers Association said bread shortages are set to worsen unless the price of a loaf is nearly doubled to more than 5 million Zimbabwe dollars (55 U.S. cents at the dominant black market exchange rate) for a regular loaf.