News / National
Zimbabwe inflation gaining momentum
25 Aug 2011 at 05:06hrs | Views
Finance Minister, Tendai Biti, has warned local businesses that import restrictions imposed to help the local industry and manufacturing sector fight stiff competition from foreign products imported for resale in the country could be restored if companies continue to hike prices of goods and commodities.
Biti appeared worried, saying although no arrests will be made for companies raising prices for goods, tough measures such as lifting the duty on imported goods will be implemented. Local analysts spoke highly of Biti's cautionary statement, saying the finance minister was right in chiding businesses as prices could exert unnecessary inflationary pressures on the economy.
"This is a good call at the right time, because inflation was beginning to spike up. The only worry is that people might not take Biti seriously but his measures to lift the duty on imported goods should help sent the message across," said Jeffrey Kasirori, an economic analyst.
"Inflation is gaining momentum and this is coming from food price increases. These are worrisome developments, which if not addressed will reverse the gains made on overall macroeconomic stabilisation and we are very concerned by the attitude of our business sector," Biti said.
He added that inflation was eating into people's disposable incomes and savings. "The government will not hesitate to take appropriate action in protection of the general consumers where such positive dispensations to local producers are abused."
He had no kind words for the excessively profiteering companies, most of them large multinationals, saying the government would not hesitate to "remove the import tariffs" limiting and restricting imports of goods that are also locally produced. "We want to make it clear that we restored duty on goods we thought were now locally available. Business should refrain from unethical conduct." he said.
Despite the worrisome trends witnessed on the local market, where residential and housing rentals have also shot up from $40 per room to $60 per room in the past month, Zimbabwe remains on course to achieve its end of year inflation target of 4.5%. However, the pressures on the inflation rate will have to be addressed while annual GDP growth for 2011 is still expected at 9.3%.
"There is no doubt that we'll be able to meet our GDP growth target of 9.3%, which is actually understated." He further highlighted that "inflation, which was contained below 3% during the second quarter of 2011, is gaining momentum," having surged to 3.3% in July.
He said the high July inflation rate was mainly on account of food price increases and to some extent, some non-food items, particularly detergents and hotel accommodation and catering services, whose inflation rates were at 3.56% and 3.13% respectively.
Biti appeared worried, saying although no arrests will be made for companies raising prices for goods, tough measures such as lifting the duty on imported goods will be implemented. Local analysts spoke highly of Biti's cautionary statement, saying the finance minister was right in chiding businesses as prices could exert unnecessary inflationary pressures on the economy.
"This is a good call at the right time, because inflation was beginning to spike up. The only worry is that people might not take Biti seriously but his measures to lift the duty on imported goods should help sent the message across," said Jeffrey Kasirori, an economic analyst.
"Inflation is gaining momentum and this is coming from food price increases. These are worrisome developments, which if not addressed will reverse the gains made on overall macroeconomic stabilisation and we are very concerned by the attitude of our business sector," Biti said.
He added that inflation was eating into people's disposable incomes and savings. "The government will not hesitate to take appropriate action in protection of the general consumers where such positive dispensations to local producers are abused."
He had no kind words for the excessively profiteering companies, most of them large multinationals, saying the government would not hesitate to "remove the import tariffs" limiting and restricting imports of goods that are also locally produced. "We want to make it clear that we restored duty on goods we thought were now locally available. Business should refrain from unethical conduct." he said.
Despite the worrisome trends witnessed on the local market, where residential and housing rentals have also shot up from $40 per room to $60 per room in the past month, Zimbabwe remains on course to achieve its end of year inflation target of 4.5%. However, the pressures on the inflation rate will have to be addressed while annual GDP growth for 2011 is still expected at 9.3%.
"There is no doubt that we'll be able to meet our GDP growth target of 9.3%, which is actually understated." He further highlighted that "inflation, which was contained below 3% during the second quarter of 2011, is gaining momentum," having surged to 3.3% in July.
He said the high July inflation rate was mainly on account of food price increases and to some extent, some non-food items, particularly detergents and hotel accommodation and catering services, whose inflation rates were at 3.56% and 3.13% respectively.
Source - Sapa
