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Zim inflation breaches 1 000%

May 12 2006 13:43

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Harare - Zimbabwe's annual inflation stormed to a record 1 042.9% in April, surging into four figures for the first time, official figures showed on Friday.

The world's highest inflation rate is the product of an economic meltdown also marked by shortages of foreign currency, fuel and food and rising unemployment.

The data had been due for release on Wednesday, but that was abruptly cancelled and CSO officials would not say what had caused the delay.

The CSO said on a monthly basis, the consumer price index leapt by 21.1% from 19.8% in March as prices increased on an almost daily basis.

Analysts said the economic crisis was heaping pressure on President Robert Mugabe's 26-year rule while the opposition has raised the stakes by calling for peaceful anti-government mass protests.

Scarce fuel supplies have pushed up transport costs, school fees have more than doubled while house rentals have surged following the government's controversial clean-up operation last year, which demolished homes and left thousands without shelter.

The inflation is playing havoc with the finances of ordinary Zimbabweans, who must often go shopping with huge wads of cash for simple purchases that can cost millions of Zimbabwe dollars.

The central bank last month raised its key interest rate to 800% to put brakes on spiralling inflation.

Analysts say the government would have to borrow or print money to finance a 300% salary hike awarded to civil servants and soldiers ahead of the planned opposition protests.

Mugabe has previously said his government will print money to shore up the economy and says sabotage by the West, led by former colonial power Britain in retaliation for the seizures of land from white commercial farmers, has fanned Zimbabwe's crisis.

 
 
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