Cost of living jumps to $32 540

THE average cost of living for a family of five increased to $28 853 this month, from $28 362 in April, as reports emerged that supermarkets had been computing prices based on parallel market rates.

According a Zimbabwe National Statistics Agency (ZimStat) report released on Friday, families, on average, added about $500 for basic commodities this month.

ZimStat said prices rocketed at a faster pace in Mashonaland Central, where consumers required $32 540 to fill up the family basket, with Bulawayo and Matabeleland North provinces requiring over $30 000.

"The Total Consumption Poverty Line for Zimbabwe stood at $5 770,64 per person in May 2021," Zimstat said.

"This means that an individual required that much to purchase both non-food and food items as at May 2021 in order not to be deemed poor.

"This represents an increase of 1,7% when compared to the April 2021 figure of $5 672,47," the agency added.

It said a single person required $5 770,64 this month to make it without struggling, from $5 672,47 last month.

The $5 770, 64 translates to $28 853 for a family of five.

At the heart of price hikes was a switch by supermarkets to tracking parallel market rates in their pricing models, even after accessing foreign currency at the forex auction system, according to the Zimbabwe Independent. Foreign currency parallel market rates have been hovering around $135:US$1 in the past month, against ZW$84:US$1 at this week's auction system.

But supermarket chains have been among recipients of foreign exchange through the official market since the auction system kicked off last year, according to Reserve Bank of Zimbabwe data. Retailers have denied profiteering by manipulating multiple pricing systems currently available on the market.

But in a paper lodged with the ministry of Finance spelling out its expectations for the upcoming midterm budget review, the Confederation of Zimbabwe Retailers said last week that the sector had been held back by monthly fuel price hikes.

"The confederation is strongly against the current trend of raising fuel prices almost on a monthly basis, as this works against the theme of the 2021 national budget: Building Resilience and Sustainable Economic Recovery, the CZR said, calling for a "pro-poor budget".

"The fuel hikes are making the business environment become unpredictable and difficult for planning purposes.

"Zimbabwe is also said to have the most expensive fuel in the region, which makes it unattractive for business.

"The rise in fuel prices results in households spending an increased share of their budgets on fuel, which leaves less to spend on other goods and services.

"The same also goes to businesses whose goods must be transported from place to place or use power generators during electricity cuts.

"These higher fuel prices are therefore making production more expensive for businesses," it added.

Zimbabwe has had monthly fuel price reviews on the fifth of every month since January.

The net effect was a 7,31% increase in the price of Diesel 50, and a 10,74% surge in that of Blend E10 between January 5 and April 5, 2021.

Fuel is 44% more expensive in Zimbabwe compared to regional peers, according to data from the Zimbabwe Energy Regulatory Authority.

ZimStat said the cost of living for Mashonaland East was $31 485, Manicaland was at $30 820 and Mashonaland West was at $28 945.

The cost of living for Masvingo was $29 710 while Harare was $28 800, with Midlands' basket pegged at $26 870.

Matebeleland South's basket cost $25 800. This data demonstrates that Zimbabwe economic crisis was worsening, as the majority of people including some professionals and civil servants are at risk because they earn far less than the TCPL.

On average, formally employed Zimbabweans earn about $20 000, although some earn much less.