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Zimbabwe Inflation Approaches 8,000%, Local Currency Plummets

Inflation in Zimbabwe soared to nearly 8,000% in September after briefly falling under 7,000% in August, according to the country's Central Statistical Office.

The official 12-month inflation rate was 7,982% in September, the statistical office said, following 6,592% in August, when it declined from over 7,000%.

Meanwhile, the Zimbabwe dollar has plummeted in value in recent days, depreciating to Z$1 million to the U.S. dollar compared with Z$700,000 a few days earlier.

The Reserve Bank of Zimbabwe's official exchange rate is Z$30,000 per U.S. dollar.

The statistical office did not offer a breakdown as to which items were driving inflation, saying only that food inflation was marginally lower than nonfood inflation.

Economic experts and business leaders expressed concern at the latest collapse of the currency, warning this would drive the inflation rate even higher. Most businesses have to turn to the parallel market to obtain hard currency, which obliges them to charge ever more for their products or lose money under state price caps.

Secretary General Tendai Biti of the opposition Movement for Democratic Change faction headed by Morgan Tsvangirai said the economy could not be saved unless a solution was found to the country's longstanding political crisis.

Economist John Robertson of Harare told reporter Blessing Zulu of VOA's Studio 7 for Zimbabwe that the government's grip on the economy was exacerbating the crisis and that it needed to let market forces function properly for the economy to function.

Meanwhile, poverty indexes from organizations such as the World Bank have shown Zimbabwe continuing to plunge deeper into poverty.

A recent World Bank report noted that poor governance had compromised economic growth prospects and increased poverty. Elsewhere, the World Economic Forum’s Global Competitiveness Index also gave Zimbabwe a poor rating.

With World Poverty Day being observed on Wednesday, Programs Manager Pedzisayi Ruhanya of the Crisis in Zimbabwe Coalition told reporter Ndimyake Mwakalyelye that there is little hope of an economic turnaround given the political standoff which regionally sponsored crisis talks have barely budged.

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