Zimbabwe reaches new heights of inflationary incompetence

Times:

Zimbabwe’s economic meltdown is gathering pace, with inflation spiralling to almost 15,000 per cent, according to figures leaked yesterday.

The 14,840 per cent annual inflation in October was nearly double what it was in September. Prices between September and October rose 135 per cent.

President Mugabe told state media that “Zimbabwe will not collapse, now or in the future,” even as his strategy for beating inflation with draconian price controls lay in ruins.

In June Mr Mugabe ordered businesses to slash prices to below what it cost them to stock shelves. Annual inflation has since shot up nearly 10,000 percentage points. “I am speechless,” said one economist. “I cannot get my head around these figures. They are so enormous.”

But the consequences were entirely predictable. Price controls and printing money are primary causes of inflation. “It is ludicrous. The economy hasn’t collapsed for him and his ministers in their Hummers and their Mercedes-Benzs. But they have made it collapse for everyone else.”

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Other countries stricken by hyperinflation have coped by printing vast quantities of banknotes with rapidly increasing numbers of zeroes.

In Zimbabwe, however, the phenomenon of “Mugabenomics” has delivered a three-headed monster — exponentially rising prices, a critical cash shortage, because the Government regards adding new rows of zeroes on the banknotes as an admission of defeat, and virtually nothing to buy in the shops because price controls have destroyed the retail trade.

The Z$200,000 (7p) note, the highest, has almost disappeared. This week banks were issuing batches of Z$20 million in wads of $500 bills stuffed in plastic bags.

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The search for cash is an unrelenting daily ordeal for Zimbabweans, who were paying Z$1.6 million for a bus fare to and from work yesterday, Z$800,000 for a loaf of bread, and Z$700,000 for a pint of beer.

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Don't worry Mugabe is going to add even more price controls which should mean even fewer goods will be available. My question is when is he going to run out of paper and ink?