Identifier
Created
Classification
Origin
07HARARE1003
2007-11-07 14:50:00
CONFIDENTIAL
Embassy Harare
Cable title:
ZIMBABWE INFLATION REQHES 60,000 PERCENT
VZCZCXRO0436 PP RUEHDU RUEHMR RUEHRN DE RUEHSB #1003 3111450 ZNY CCCCC ZZH P 071450Z NOV 07 FM AMEMBASSY HARARE TO RUEHC/SECSTATE WASHDC PRIORITY 2104 INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY RUEHUJA/AMEMBASSY ABUJA 1766 RUEHAR/AMEMBASSY ACCRA 1642 RUEHDS/AMEMBASSY ADDIS ABABA 1773 RUEHBY/AMEMBASSY CANBERRA 1050 RUEHDK/AMEMBASSY DAKAR 1399 RUEHKM/AMEMBASSY KAMPALA 1830 RUEHNR/AMEMBASSY NAIROBI 4258 RUEHGV/USMISSION GENEVA 0896 RHEHAAA/NSC WASHDC RHMFISS/JOINT STAFF WASHDC RUEHC/DEPT OF LABOR WASHDC RUEATRS/DEPT OF TREASURY WASHDC RHEFDIA/DIA WASHDC//DHO-7// RUCPDOC/DEPT OF COMMERCE WASHDC RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK//DOOC/ECMO/CC/DAO/DOB/DOI// RUEPGBA/CDR USEUCOM INTEL VAIHINGEN GE//ECJ23-CH/ECJ5M//
C O N F I D E N T I A L HARARE 001003
SIPDIS
SIPDIS
AF/S FOR S. HILL
NSC FOR SENIOR AFRICA DIRECTOR B. PITTMAN
STATE PASS TO USAID FOR L.DOBBINS AND E.LOKEN
TREASURY FOR J. RALYEA AND T.RAND
COMMERCE FOR BECKY ERKUL
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
E.O. 12958: DECL: 01/12/2016
TAGS: EFIN ECON PGOV ZI
SUBJECT: ZIMBABWE INFLATION REQHES 60,000 PERCENT
REF: HARARE 0951
Classified By: Pol/Econ Deputy Chief Frances Chisholm under Section 1.4
b/d
C O N F I D E N T I A L HARARE 001003
SIPDIS
SIPDIS
AF/S FOR S. HILL
NSC FOR SENIOR AFRICA DIRECTOR B. PITTMAN
STATE PASS TO USAID FOR L.DOBBINS AND E.LOKEN
TREASURY FOR J. RALYEA AND T.RAND
COMMERCE FOR BECKY ERKUL
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
E.O. 12958: DECL: 01/12/2016
TAGS: EFIN ECON PGOV ZI
SUBJECT: ZIMBABWE INFLATION REQHES 60,000 PERCENT
REF: HARARE 0951
Classified By: Pol/Econ Deputy Chief Frances Chisholm under Section 1.4
b/d
1. (C) PricewaterhouseCoopers (PWC) put the annual (monthly)
rate of increase in the cost of living for low, middle and
high-income earners in October at 73,221 percent (181
percent),62,414 percent (123 percent),and 68,609 percent
(174 percent) respectively. TM Supermarkets shared its
October figures with us, as well: 66,193 percent and 268
percent m-o-m. OK Supermarkets came in at the low end:
29,494 percent for the low-income group and 33,357 percent
for higher earners.
2. (C) In conveying the widely respected PWC figures to
econoff on November 7, senior partner Tinashe Rwodzi admitted
that PWC had bowed to pressure from the GOZ not to release
its monthly Cost of Living Analysis to subscribers and did
not dare to re-start distribution, which ceased with the July
report, "until the shelves are full." Since PWC's current
figures are based primarily on prices in the informal market,
their publication would reflect badly on the GOZ and
undermine its assertion that at least basic goods are
re-appearing on the formal market. In the meantime, the
GOZ's Central Statistical Office has not released cost of
living figures since its July report which put the annual
rate of inflation at 7,634 percent and the monthly rate of
increase at 31.6 percent. (Note: The CSO uses the controlled
or monitored prices of mostly unavailable goods in its
calculations.)
--------------
Comment
--------------
3. (SBU) Although one of the main functions of a reserve bank
is to ensure price stability through implementation of
prudent monetary policies, the RBZ is doing exactly the
opposite: its reckless off-budget spending, parallel market
activities, and printing of money to fund government
operations are driving inflation. Under the circumstances,
Reserve Bank Governor Gono's promise in delivering his
monetary policy statement on October 1 that "most basic goods
should and will return to the shelves within the next three
to four weeks time," has remained unfulfilled and the rate of
inflation has quickened and will likely continue to
accelerate under current policies.
DHANANI
SIPDIS
SIPDIS
AF/S FOR S. HILL
NSC FOR SENIOR AFRICA DIRECTOR B. PITTMAN
STATE PASS TO USAID FOR L.DOBBINS AND E.LOKEN
TREASURY FOR J. RALYEA AND T.RAND
COMMERCE FOR BECKY ERKUL
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
E.O. 12958: DECL: 01/12/2016
TAGS: EFIN ECON PGOV ZI
SUBJECT: ZIMBABWE INFLATION REQHES 60,000 PERCENT
REF: HARARE 0951
Classified By: Pol/Econ Deputy Chief Frances Chisholm under Section 1.4
b/d
1. (C) PricewaterhouseCoopers (PWC) put the annual (monthly)
rate of increase in the cost of living for low, middle and
high-income earners in October at 73,221 percent (181
percent),62,414 percent (123 percent),and 68,609 percent
(174 percent) respectively. TM Supermarkets shared its
October figures with us, as well: 66,193 percent and 268
percent m-o-m. OK Supermarkets came in at the low end:
29,494 percent for the low-income group and 33,357 percent
for higher earners.
2. (C) In conveying the widely respected PWC figures to
econoff on November 7, senior partner Tinashe Rwodzi admitted
that PWC had bowed to pressure from the GOZ not to release
its monthly Cost of Living Analysis to subscribers and did
not dare to re-start distribution, which ceased with the July
report, "until the shelves are full." Since PWC's current
figures are based primarily on prices in the informal market,
their publication would reflect badly on the GOZ and
undermine its assertion that at least basic goods are
re-appearing on the formal market. In the meantime, the
GOZ's Central Statistical Office has not released cost of
living figures since its July report which put the annual
rate of inflation at 7,634 percent and the monthly rate of
increase at 31.6 percent. (Note: The CSO uses the controlled
or monitored prices of mostly unavailable goods in its
calculations.)
--------------
Comment
--------------
3. (SBU) Although one of the main functions of a reserve bank
is to ensure price stability through implementation of
prudent monetary policies, the RBZ is doing exactly the
opposite: its reckless off-budget spending, parallel market
activities, and printing of money to fund government
operations are driving inflation. Under the circumstances,
Reserve Bank Governor Gono's promise in delivering his
monetary policy statement on October 1 that "most basic goods
should and will return to the shelves within the next three
to four weeks time," has remained unfulfilled and the rate of
inflation has quickened and will likely continue to
accelerate under current policies.
DHANANI