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Zimbabwe Reports Inflation Decline - But Economists Not Convinced


Consumer inflation in Zimbabwe declined in August to 6,592.8% compared with July's figure of 7,634.8%, the country's Central Statistical Office reported Tuesday, but economists questioned whether the figures reflected the true cost of living.

The agency attributed the slowdown of more than 1,000 percentage points to a drop in prices for food and non-alcoholic beverages resulting from the government's June-July campaign to force producers, wholesalers and retailers to slash their prices.

It said the cost of living rose 11.8% in August after 31.6% in July.

But independent economists said they doubted inflation had declined, noting that the statistical agency based its findings on official, controlled prices, whereas consumers must pay far more on the parallel market to obtain extremely scarce goods.

Harare Economist Eric Bloch told reporter Ndimyake Mwakalyele of VOA's Studio 7 for Zimbabwe that the CSO figures flatter inflation performance for two reasons.

On the one hand, inflation has been in the stratosphere for so long that the base of comparison 12 months ago makes for a less stunning percentage change.

More importantly, he added, the latest report is not based on real-world prices and "disregards the fact that virtually no products are available at the official prices."

The latest data "are totally false, totally meaningless, because they are based on prices at which one cannot obtain goods," Bloch concluded, estimating that in fact inflation has climbed to about 14,000% - more than double the official rate.

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

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