Browsing: Financial crisis in Zimbabwe

  • Zimbabwe has official inflation of 96% but economists predict the figure could be as high as 256%
  • A widespread shortage of basic commodities
  • Economists fear the situation could get to 2008 levels when all shops were empty

Zimbabwe is reeling under a new wave of inflation.

Two weeks ago, President Emerson Mnangagwa announced via a late-night broadcast that banks would not be allowed to lend money to the government and the public sector. The announcement caught many unawares and shook the market due to this policy inconsistency.

 

President Mnangagwa pulled the rug from under the very economy he is trying to revive. Zimbabwe has official inflation of 96%. However, economists predict the figure could be far higher. Economist Steve Hanke puts the figure north of 256%. This is more than double the official rate. According to the Consumer Council of Zimbabwe, a family of six needs $120 835 for …

Nothing should ever be taken at face value…more so if what is being presented is economic statistics and data.

Objectivity is essential in dealing with any kind of economic analysis to get the most accurate and truthful picture of a country. Zimbabwe’s central bank presented its midterm monetary policy review against a background of the COVID-19 pandemic and an economy that authorities say is on the rebound.

The Reserve Bank of Zimbabwe (RBZ) prefaced its policy review by stating that inflationary pressures have dissipated which it called conducive and supportive of its expected economic growth rate of 7.8 per cent in 2021. 

The policy review was characterized by optimism on the part of the monetary authorities as it painted a rosy economic outlook. The tone of the document was very upbeat with the RBZ expecting global economic recovery from the adverse effects of the coronavirus pandemic because of the stimulus