Zimbabwe revealed Thursday that consumer prices doubled last month alone, sending the country's annual inflation rate — already the highest in the world — to 3,714 per cent.
At a time when the Bank of Canada is worried if inflation approaches three per cent a year, imagine the situation facing the Reserve Bank of Zimbabwe. It has to deal with inflation approaching three per cent a day.
| Annual inflation rates in Zimbabwe | |
|---|---|
| Month | Rate |
| November 2006 | 1,099% |
| December 2006 | 1,281% |
| January 2007 | 1,594% |
| February 2007 | 1,730% |
| March 2007 | 2,200% |
| April 2007 | 3,714% |
| Source: Reserve Bank of Zimbabwe | |
The Zimbabwean dollar is so worthless that the New York Times reported earlier this year that the smallest bill was worth about the same as the cost of single sheet of toilet paper. The offical exchange rate is meaningless.
CPI figures provided by the Zimbabwe central bank show that goods that cost $100 in mid-2001 cost about $4 million last month.
The troubled country's economy has collapsed amid widespread government corruption and mismanagement.
Unemployment runs at 80 per cent, many businesses have shut down, and many consumer goods are unavailable at any price.
Government-imposed price freezes have succeeded only in creating a huge black market in scarce food products.
President Robert Mugabe lays the blame for the crisis on the West's economic sanctions on his country, which were imposed following widespread fraud in the 2002 presidential election.
But Mugabe's critics say his economic policies — including the confiscation of all white-owned farmland — are the major cause of Zimbabwe's problems.
Earlier this week, Mugabe approved the establishment of a new commission to monitor and control prices and incomes. But few think it will work.
