Zimbabwe's inflation soars to 131.7%

A man counts a wad of the new Zimbabwean ten-dollar notes received from an ATM outside a bank in Harare in May 2020. PHOTO/AFP

What you need to know:

  • A foreign currency shortage has left local companies battling to buy supplies from overseas to produce goods in Zimbabwe.

Zimbabwe's inflation rate jumped to 131.7 percent in May, the statistics office said Wednesday, as fallout from the Ukraine war hit an already battered economy.

Inflation reached triple digits for the first time since June last year with prices of cooking oil and bread leaping higher as a result of Russia's invasion of Ukraine.

The government last week tried to tamp down prices by suspending import duty on basic commodities like cooking oil, rice and flour.

Inflation was already at 96.4 percent in April, the Zimbabwe National Statistical Agency said in a statement.

A foreign currency shortage has left local companies battling to buy supplies from overseas to produce goods in Zimbabwe.

The war in Ukraine has cut off a key supplier of wheat to Zimbabwe and also reduced supplies of farm chemicals for local crops.

Rising prices revive memories of hyperinflation seen more than a decade ago when inflation spiralled so far out of control that the central bank in 2008 issued a 100-trillion-dollar note, which has now become a collectors' item.

The government then ditched the local currency and adopted the US dollar and the South African rand as legal tender.

But in 2019 the government reintroduced the Zimbabwean dollar, which is already rapidly declining in value.

Welcome!

You're all set to enjoy unlimited Prime content.