Zimbabwe inflation hits post-dollarisation high

Zimbabwe’s annual inflation rose to 5.39 percent in September, its highest in the post-dollarisation era, the Zimbabwe National Statistics Agency said today.

Month-on-month, inflation stood at 0.92 percent after gaining 0.53 percentage points from 0.39 percent in August, said Zimstat.

After hyperinflation rendered its currency worthless, Zimbabwe switched to mainly the US dollar and the highest rate of inflation recorded since then was 5.3 percent in May 2010.

Critics, however, believe the figure is understated.

Steve H. Hanke, a professor of applied economics at Johns Hopkins University, says in the period to October 12, inflation was at 155.8 percent.

Finance Minister Mthuli Ncube said he did not want to argue with Hanke because there are many ways of measuring inflation but he said that Zimstats had a long record of providing quality statistics.

Ncube, who was at one time vice-president and chief economist of the African Development Bank said Zimstats ranked quite highly in terms of organisations that provided quality statistics when he was at the bank.

Hanke, a member of the right-wing Cato Institute which is dedicated to the principles of individual liberty, limited government, free markets and peace today said calculates Zimbabwe’s inflation using the Old Mutual Implied Rate and the purchasing power parity methodology.

He said he was able to do so despite lying government statistics.

“I can calculate this, despite lying gov statistics, by comparing the price of Old Mutual on the Zimbabwe Stock Exchange to the London Stock Exchange & using PPP methodology,” he said.

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