Accessibility links

Confusion Over Price Freeze Plan Feeds Surge In Zimbabwe Prices

The Consumer Council of Zimbabwe said Friday that the cost of basic goods needed by households surged nearly 50% in February, while economists said apprehension about a price freeze mooted by the central bank had fueled the run-up in prices.

The Consumer Council said a family of six needed Z$686,000 last month to meet its basic needs, compared with Z$459,000 in January. The council noted large increases in the prices of soap, vegetables, milk, rice and maize meal, a Zimbabwean staple.

Chief economist Prosper Chitambara of the Labor and Economic Development Research Institute of Zimbabwe said workers at the bottom of the private sector pay scale earn just Z$90,000 a month - 13% of the council's "breadbasket" figure, while public workers who just received a large increase bring home Z$300,000.

The Consumer Council's regional manager for Matabeleland, Comfort Muchekeza, told reporter Blessing Zulu of VOA’s Studio 7 for Zimbabwe that the surge in prices was partly drive by misinterpretation of a statement by Reserve Bank Gideon Gono in January recommending the institution of a freeze on prices effective March 1.

Economist Eric Bloch said an acute scarcity of foreign exchange and the consequent surge in the parallel market exchange rate drove up prices of imported goods.

More reports from VOA's Studio 7 for Zimbabwe...