Zimbabwe Inflation

Zimbabwe inflation has taken its toll and is posing to be a threat for the nation and its people. Zimbabwe inflation has not only affected the normal pace of life, it is also causing political disharmony. It has been observed lately, that inflation is engulfing the nation, at a pace faster, than was anticipated. Such is the situation in Zimbabwe, that economic growth is a far cry.

Effects of Zimbabwe inflation:

• Electric supply was at stake
• As water treatment system had collapsed, it led to an epidemic of cholera.
• Public service network became fragile.
• In the health care sector, the medical professionals, including the nurses as well as the doctors had ceased work in demand for a rise in their salaries. With the medical professionals ceasing work, one could well imagine how reliable the health care sector had become.

The government in Zimbabwe had increased the wages of workers, so that the workers could combat inflation. However, the wage that was increased was just a drop in the ocean. Every worker had a 300% hike. Despite this hike, the rise in wages could hardly fulfill the purpose.

Statistics say the following:

Zimbabwe inflation has reached a point of hyperinflation. Zimbabwe inflation rate was 1,281% (yearly) in the month of February, 2007. Since, April, 2006 inflation rate in Zimbabwe has maintained 1000% inflation rate. Due to hyperinflation in Zimbabwe, the government became bankrupt. When the governing body surrenders, one can well understand the fate of the people. Approximately, 7 out of 10 people are poor and have nothing to bank on. It is a well known fact, that when inflation strikes, the purchasing power diminishes and currency of that country loses its value, so even increase in salaries could not retain the purchasing power of the common man. As per records, cost of cooking oil, clothing and meat had escalated 223% in February, 2007. Owing to increase in cost of commodities, state governments as well as the national government are finding it difficult to make ends meet, with regard to budget as well as raw materials for various businesses. In an effort to provide subsidies to organizations and various companies, the treasury of the government has become empty. This in turn has facilitated corruption.

Reactions of Zimbabwe’s central bank:

The Central Bank of Zimbabwe, retorted back by saying that the hyperinflation prevailing in Zimbabwe is illegal. The bank went on to say that during the period March 1st, through June, 30th, one found hiking costs or salaries could be punished severely. Annual rate of inflation in the country was recorded as 3,714% during April end, 2007.The government is losing control due to hyperinflation and this is taking place in almost all sectors of the economy. This is evident from the fact, that the black marketers are enjoying a greater share of the pie, with the government losing control.