Published: 18 October 2017

Zimbabwe's annual inflation gained 0.64 percent in September to 0.78 percent from 0.14 percent is projected to close the year 2018 at levels between 10 and 99 percent, the Parliament Budget Office (PBO) has said.

The major factors driving the upward trend in inflation include foreign shortages to import raw materials that led to high premiums being charged on hard currency.

"It is clearly evident that the country is headed for 2-digit inflation by end of year 2018," said the Office in its first half budget performance and outlook report.

Analysts said government borrowing was pushing up money supply and ultimately inflation, which rose to 0.78 percent year-on-year in September, its fastest rise since 2009.

Most independent economic analysts, however, say annual inflation has already hit double digit figures following an increase in prices, especially of imported goods.

Zimbabwe is struggling to pay for imports due to the dollar crunch, which has also caused acute cash shortages.

This is expected to further strain all efforts to build public confidence in the banking system.

Such high levels will breach the generally accepted inflation rate of 2 percent and Sadc's benchmark of 7 percent.
- online

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