Zimbabwe has lowest inflation in the region

Zimbabwe, which only three years ago had the highest inflation in the world, now has the lowest inflation in the region and even has lower inflation than the world largest economy, the United Sates.

Its annual inflation stood at 2.9 percent in June, almost half that of its nearest competitor in the region, South Africa, whose inflation stood at 5 percent. Inflation in the United States stood at 3.6 percent.

Finance Minister Tendai Biti said last week the current inflation levels, in maintained, would enhance the country’s competitiveness in the region.

The only damper was the politics. Biti said the political challenges surrounding the inclusive government and the slow implementation of certain sections of the Global Political Agreement had remained the number one nightmare.

“The fact that Zimbabwe continues to be a permanent agenda at SADC is bad enough,” Biti said. “Therefore political issues are imposing serious shocks and pressures on our economy. More importantly, the same are reducing the planning horizon, creating the matrix of policy inconsistencies and double speak as well as compounding country risk.”

The Zimbabwe African National Union-Patriotic Front and the Movement for Democratic Change have been squabbling about when the country will hold its next elections with ZANU-PF insisting they should be held this year while the MDC says they should be held when the climate is right.

The Constitutional Select Committee says it will only finish drafting the new constitution in October and expects that a referendum can be held in January. But the executive has the final say on when the referendum will be held.

More Zimbabweans are happier with the economic recovery and view elections with a lot of suspicion as they mean violence which could in turn lead to a reversal of the gains the country has already made.

Biti said political conflict, violence and discord imposed a tax on a country’s development. Throughout the 1980s countries that were affected by conflict and violence lagged in poverty reduction by 8 percent and those that experienced major violence by 16 percent, he said.

Zimbabwe’s economy shrunk by 40 percent during its period of turmoil between 2000 and 2008.

Inflation for selected countries in SADC

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