HARARE – Zimbabwe’s annual inflation has dropped by more than 100 percentage points since the introduction of gold coins on 25 July to mop out excess liquidity in the market according to United States economist Prof. Steve Hanke’s inflation calculator but he refuses to credit this to government measures and instead insists that Zimbabwe must dollarise to crush inflation.
According to Hanke, Zimbabwe’s inflation was 595% just before the country introduced the gold coins. It dropped to 487% on 4 August and is down to 479% but he insists: “In Zimbabwe, inflation rages at 479%/yr by my measure. Zim’s introduction of gold coins is simply a way to reward ZanuPF CRONIES (read: a de facto Zim mafia). To crush inflation, Zimbabwe must dollarize IMMEDIATELY.”
Zimbabwe National Statistics Agency director-general Taguma Mahonde has dismissed Hanke’s inflation figures and even alleged that Hanke had a beef with the government for refusing to give him a consultancy following the 2017 change of administration.
Zimstat put Zimbabwe inflation at 257% in July.
Hanke rubbished Mahonde’s claim and tweeted two days ago: “Zimbabwe’s adoption of gold coins as legal tender is merely a vehicle for the gov’t (read: ZANU-PF) to reward cronies. Like most monetary programs in ZW, the gold coin program is a fraud on the public, one designed to fill the ZANU-PF faithful’s pockets.”
Though the inflation figure for August is not yet out, Finance Minister Mthuli Ncube said annual inflation is likely to go up until September but month-on-month inflation is likely to drop.
The introduction of gold coins has witnessed the black market rate of the Zimbabwe dollar to the United States dollar drop for the first time in months, from $950 to $800.