Zimbabwe Inflation Rising as Disinflationary Effect of Hard-Currency Move Fades
The inflation news came on the eve of an International Monetary Fund meeting to consider reinstating Zimbabwe's voting rights
Though the annual inflation rate is still negative, the 2.4% increase in prices in the past two months is likely to concern economists, though the rolling three month annualized average of 9.2% remains far from hyperinflationary levels Zimbabwean consumer prices rose 0.7 percent in January after a 1.8 percent monthly gain in December, leaving the 12-month inflation through January at -4.8 percent, the Central Statistical Office said Thursday. The annual inflation rate in December was -7.8 percent, but a hefty 2.3 percent decline in prices in January 2009 fell out of the calculation and recent rising prices for basic goods eroded the legacy of disinflationary forces early last year resulting from the adoption of a monetary regimen of mixed hard currencies - primarily the U.S. dollar, the South African rand and the Botswana pula. Though the annual inflation rate is still negative, the 2.4% increase in prices in the past two months is likely to concern economists, though the rolling three month average of 0.8% remains relatively tame compared with the hyperinflation of recent memory. Harare economist John Robertson told VOA Studio 7 reporter Blessing Zulu that higher prices are in store this year after disinflation in 2009. The inflation news emerged one day before the International Monetary Fund in Washington was to consider reinstating Zimbabwe's voting rights, suspended in 2003 over debt arrears and disagreements over macroeconomic policy. IMF spokesman David Hawley told Reuters that the restoration of voting rights would not mean that Zimbabwe regained access to multilateral credit. "Access to general resources would depend on Zimbabwe clearing its arrears to the (IMF) Poverty Reduction and Growth Trust,” Hawley said. Finance minister Tendai Biti is due in Washington on Friday. He previously told VOA that Germany, Britain and the United States have assured him that they will not oppose the restoration of Zimbabwe's voting rights.