Zimbabwe estimates inflation at 2.2 million percent

Tag : Soap Supply

The central bank also released a schedule showing what it calleddistortions in prices caused by black-market trading andprofiteering.
It said the price of laundry soap on the black market went up by 70million percent, cooking oil by 60 million percent and sugar by 36million percent - far higher than the official inflation rate of2.2 million percent calculated by the Central Statistical Office onbasic goods subject to price regulation and price increasesapproved by the National Prices and Incomes Commission.
The bank acknowledged that private consultants calculated overallreal inflation closer to 12.5 million percent. The bank attributedblack market inflation to shortages of hard currency that pushedthe black market exchange rate to at least 90 billion Zimbabwedollars for a single U.S. dollar, compared to the official bankexchange of 20 billion to dollar.
It said a four-pound bag of sugar cost about 20 billion Zimbabwedollars, or $1, at the government's fixed price.
Unskilled workers in the country earn up to 200 billion dollars amonth. Few have jobs, however, and unemployment has reached 80percent.
Gasoline is scarce and the price has soared, along with commuterbus fares that often exceed monthly earnings, forcing workers towalk to their jobs, or sell vegetables and other goods on thestreets to make up the shortfall.
The economy was a key issue in the first round of presidentialvoting, when the opposition leader, Morgan Tsvangirai, PresidentRobert Mugabe and two other candidates. According to electionofficials, however, Tsvangirai did not win the majority votenecessary to avoid a runoff.
Tsvangirai later pulled out of the runoff because of a campaign ofviolence against his supporters. Mugabe went ahead with a June 27vote widely denounced as a sham. Tsvangirai's name was kept on theballot and Mugabe was declared the overwhelming winner.
Launching the subsidized food program, Mugabe said basiccommodities subsidized by the central bank were to be distributedacross the country, enabling an average family to pay just 100billion Zimbabwe dollars, or about $5, for a basket of items -including a month's supply of cooking oil, cornmeal, flour andsoap.
At present, a single loaf of bread costs nearly 100 billionZimbabwe dollars.
It was not immediately clear how the central bank would finance thesubsidies, with health and other public services already facingcollapse because of a lack of state funding.
Food shortages have left shelves bare in most established storesand supermarkets. Many factories hurt by the economic crisis haveshut down and remaining manufacturers operate at below 30 percentof their capacity, according to the private Confederation ofZimbabwe Industries.
Self-sufficient in cooking oil, soap, toilet tissue and otherproducts as recently as 2006, Zimbabwe now imports such goodsmostly from Egypt, Iran, Malaysia, China and neighboring SouthAfrica.
Independent civic groups report cheap goods already distributedearlier this month to designated shops in provincial towns beingsold only to buyers carrying membership cards issued by Mugabe'sparty.