In a shocking turn of events ZIMSTAT the government agency tasked with producing inflation figures among other things, has said that they have now recalculated the inflation rate for July. In a move that is likely to cause howls and accusations that the institution has been captured by the state the agency has slashed the inflation rate for July almost by half.
Zimbabwe’s statistics agency (Zimstat) restated the year on year inflation for July to 485.27% from the 840% which it had initial reported, after making adjustments to the Consumer Price Index(CPI)
According to Zimstat the new CPI is a blend which measures the combined price changes of goods and services in both the American and Zimbabwe dollars.
On a month-on-month basis prices increased by 16.65% in July.
The Total Consumption Pverty Line (TCPL) for Zimbabwe stood at $3 114.57 in July an incrase of 37.4% compared to the June figure of $2 266.76Fingaz’s update on the changes
Tambaring with the results
The state has been in overdrive to point out there is no crisis in Zimbabwe and a fall in inflation from over 700% in June to just under 480% gives the impression that things are improving. It is reminiscent of the surplus that the Finance Minister is always talking about or the surge in Zimbabwe’s GDP after the economy had been rebased. It’s a sleight of the pen kind of positivity that is unlikely to improve people’s standing.
The truth remains that most people’s incomes have been severely outpaced by the increase in prices making them poorer nomatter what the statistics say. Restating the inflation figure is probably going to create a disconnect between what people feel the inflation rate ought to be and what the official rate is. In times past the government has even banned Zimstat from reporting official inflation figures but that did not make goods and services suddenly affordable sadly.
Restating official figures is going to make people distrust whatever Zimstat has to say. So is changing the method used to calculate inflation. It’s rather bizarre to be honest. The last time there was a currency change the Finance Minister ordered the agency not to report any inflation at all as the results would not be fair. Now there is what is essentially a currency change which positively reflects on inflation and he cheerfully allows figures to be restated?