FINANCE minister Mthuli Ncube, certainly well-meaning in his attempts to fix the broken Zimbabwean economy, yesterday took an unusual step to suspend the official issuing of annual inflation figures from now until February next year.
Under the guise of inflation rebasing and other technicalities — a move which smacks of an attempt to hide the ugly face of year-on-year inflation stats and wish away hyperinflation — Ncube said the figures won’t be released anymore till February 2020. He insinuated the numbers no longer reflected reality due to the changes in June from the multi-currency system to the Zimbabwean dollar.
“The change in currency regime from multicurrency to Zimbabwe dollar has definitely impacted on the base for calculation of CPI indices and hence inflation,” Ncube said.
“Given this transition, Zimstat will defer publication of year-on-year inflation, while building up data of prices in mono-currency for a period of 12 months to February 2020. This will ensure that we compare like with like in terms of currency regimes.
“This is in line with what was done in 2009 after the change of currency regime, whereby Zimstats resorted to only gazetting month-on-month inflation. Year-on-year inflation publication will therefore resume after February 2020, alongside with month-on-month inflation publication. In the interim, stakeholders are encouraged to focus more on month-on-month inflation as barometer for price developments.”
Ncube’s decision to suspend annualised inflation figures followed the stratospheric jump of inflation from 97,8% to 175,6% in June which brought back nightmarish memories of the 2008 economic meltdown and hyperinflation that was measured by some in billions and others in quintillions. Year-on-year inflation for June rose sharply by 77,75 percentage points to 175,66% from 97,85% in May, fuelled by increases in prices of basic goods. Month-on-month inflation in June was 39,26%, gaining 26,72 percentage points on the May rate of 12,54%. Month-on-month food and non-alcoholic beverages inflation stood at 55,07% in June, gaining 37,44 percentage points from 17,63% in May.
Month-on-month non-food inflation rate stood at 31,23%, gaining 21,11 percentage points on the May rate of 10,12%.
The annual inflation rate has been on the rise since the beginning of the year. It opened the year at 56,9% and in six months quickened to 175,6%, raising alarm in government and the public amid economic turmoil. Ncube claims inflation will stabilise by October and start dropping, but the reality is different. Obviously, the suspension of annual inflation figures is designed to hide the broader picture, the ugly truth and the horror it paints about the parlous state of the economy. Whatever the case, people don’t need government or statisticians to tell them about inflation, they live the reality of price escalations daily. Lived experiences tell the story better than statistics.
While Ncube has been using fiscal and monetary policy tools to good effect to contain inflation, for instance reining in the fiscal deficit and money supply, what he did yesterday is like an ugly man who smashes a mirror to hide his hideous face — self-delusion.