HomeBusiness DigestPDL could breach $160m by December

PDL could breach $160m by December

Paul Nyakazeya

ANALYSTS this week said the poverty datum line (PDL) was likely to breach the $160 million mark by year-end as the economy continues to deteriorate under

increasing inflationary pressures.

The Central Statistical Office (CSO)’s monthly basket for a family of five shot up to $38 million in April, a 22,10% percentage point increase from last month’s figure of $31 million.

The PDL represents the minimum consumption expenditure necessary to ensure that households consume a minimum food basket representing 2 100 kilocalories. The expected rise would be against a backdrop of increasing inflationary pressures in the economy.

Inflation last month breached the 1 000% mark — the highest in the world — but analysts said Zimbabweans should brace for a new record.

Independent economic consultant, John Robertson, told businesdigest that if the prevailing trend was not reversed, the PDL would breach $160 million by December.

“If this (current) trend is anything to go by, then a lot of families will not afford decent meals by year-end as it is evident that salaries will not be adjusted in line with the poverty datum line,” Robertson said.

Robertson said the same basket would be $45 million in May and $54 million in June.

In July a family of five would require $65 million, and $78 million and $93 million in August and September respectively.

In October, the family would require $112 million and $135 million in November.

According to the Consumer Council of Zimbabwe’s April consumer index, a low income urban family of six now requires at least $41 million per month to meet its monthly requirements.

Zimbabwe Allied Banking Group (ZABG) group economist, David Mupamhadzi, said rising inflation was eroding disposable incomes, but said the PDL would reach $70 million by December.

“The country is heading towards a Catch 22 situation, where workers would constantly ask for salary reviews and companies continue to increase prices to remain viable,” Mupamhadzi said.

He said the country was experiencing a wage-inflation spiral, where prices are increased once there is a salary review.

The food poverty line (FPL) for an average of five persons in Zimbabwe stood at $13 203 800 in April, said CSO director Moffat Nyoni.

“The figure is a 28,3% increase on a monthly basis and 1 100,47% on an annual basis when compared to the amount achieved in April 2005 of $220 000 per person,” Nyoni said.
He said an individual whose total consumption expenditure does not exceed the food poverty line is deemed to be very poor.

According to the CSO, the total consumption poverty line for Zimbabwe stood at $7 589 900 per person in April.

This means an individual required that much to purchase both non-food and food items as at April.

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