Staunch Zimbabwe critic, Professor Steve Hanke says efforts by Zimbabwe’s official inflation rate – at 761% – is overstated.
Hanke is an economist at Johns Hopkins University.
In a tweet on Wednesday, Professor Hanke who is on record – earlier this month – saying that “inflation is out of control in Zimbabwe and the Government fails to adequately acknowledge it.”
But he appears to have had a change of heart.
“The #ZANU-PF’s crackdown on underground currency trading has caused #Inflation in #Zimbabwe to drop significantly. Using high frequency data and sound science, I measure Zim’s inflation to be 452%/yr, almost 300 percentage points lower than the official rate,” he tweeted today.
The Professor places Zimbabwe’s current inflation at 452%, compared to the August annual rate of inflation of 761% as provided by the Zimbabwe National Statistical Agency.
Interestingly, Zimbabwe’s Finance and Economic Development Minister Mthuli Ncube has said the authorities are targeting annual inflation of 300% by the end of this year.
Improved price stability in recent weeks have likely contributed to the lowering of the annual rate of inflation
Zimbabwe’s annual inflation rate declined to 761.02% in August, down from 837.53% in July, according to ZimStats.
Prices of goods and services in the country have somewhat stabilized over the past few weeks as businesses respond positively to the entrenchment of the Reserve Bank of Zimbabwe (RBZ)’s foreign currency auction system.
The official rate, as per last week’s auction stood at 81.34 to the United States dollar.
Local analysts have said the reduction the month-on-month inflation is the best indicator of the success of measures being implemented by the Government, particularly the foreign currency auction system.
Month-on-month inflation saw a sharp slowdown in August. The rate in August was 8.44%, which was 27.09 percentage points lower than 35.53% in July.
With respect to the ‘Blended Consumer Price Index’ (Zimbabwe dollar and United States dollar), the year on year inflation rate (annual percentage change) for the month of August 2020 as measured by all items Blended CPI stood at 420.91%
ZimStats said the Blended CPI for the month ending August 2020 stood at 101.41 compared to 100.00 in July 2020 and 19.47 in August 2019.
On a Blended CPI basis, the month on month inflation rate in August 2020 was 1.41% shedding 15.24 percentage points on the July 2020 rate of 16.65.