Zimbabwe inflation rate is 69,9%, says US economist

RENOWNED United States economist Steve Hanke says Zimbabwe's annual inflation rate is 69,9%, much higher than the official figure of 4,83%.

"At present, Zimbabwe's annual inflation rate, by my measure, is 69,9%. I measure the inflation rate daily by using high-frequency data.

"At elevated inflation rates, the method I use, which is based on purchasing power parity (PPP), is very accurate.

"It measures the rate of overall inflation for all goods, services, and assets in Zimbabwe," Hanke said in emailed responses to Standardbusiness.

"In short, my ‘basket' includes everything. The PPP methodology, with the application that I use, is recognised in scholarly literature as the most accurate way to measure inflation in ‘high' inflation countries."

A paper titled, On the Measurement of Zimbabwe's Hyperinflation covering the 2008 hyperinflationary period, prepared by Hanke and fellow economist Alex K F Kwok, states the reason this method is preferred is because of lack of inflation data.

Until that data void is closed, a huge mismatch between Zimstat data and changes in the prices of goods will continue to remain.

Addressing Zimbabweans living in the United States at an investment conference meant to lure American investors recently, Finance minister Mthuli Ncube said annual inflation was 6%.

"Inflation has been well behaved hovering between 2% and 6%, currently at about 4%, but we think it may creep up, "he said.

"I was watching the prices last week and I must say we have just hit that 6% mark, but I must say it is reasonable in my view and I do not think we should be able to go above that."