An African think thank and research authority, NKC Research has projected that the Zimbabwe economy will continue deteriorating in 2019 considering the shortages of basic goods and the lack of foreign exchange.
Economist at NKC African Economics, Jee-A van der Linde, said:
Furthermore, it is unclear whether the re-introduction of the Zimbabwean dollar will yield the desired effect, because the inflation rate is vastly understated due to the large informal economy.
There is no doubt that the economy is going to suffer a contraction this year, and who knows where the inflation rate will end up in December.
His remarks come at a time when ZimStat has recently revealed that the country’s inflation has been on the rise lately.
This was at the chagrin of the Finance minister, Professor Mthuli Ncube, who had earlier projected that prices will start falling in July this year.
In an endeavour to curtail the soaring inflation, the government through Statutory Instrument 142 of 2019 banned the use of all foreign currencies for domestic transactions. The SI also reintroduced the Zimbabwe dollar which had been ditched in 2008 following a record high inflation.
It is still unclear whether the prices are responding positively or negatively to the SI as there are conflicting reports.
However, fuel stations have today raised fuel prices. Recently, Delta Corporation also raised beer prices. Some retail shops are also reported to have not heeded to the call to lower the prices of their commodities.
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