Thursday, August 20, 2009

Zimbabwe inflation quickens, crisis persists

Wed Aug 19, 2009 11:45am EDT

By Nelson Banya
HARARE, Aug 19 (Reuters) - Zimbabwe's inflation rose to 1 percent month-on-month in July from 0.6 percent in June, figures released by the Central Statistical Office showed on Wednesday, as a new unity government battles for aid to fix the economy.Zimbabwe saw hyperinflation reach 231 million percent last July until the unity government formed by President Robert Mugabe and Prime Minister Morgan Tsvangirai adopted the use of multiple currencies to replace a worthless local currency.But although supermarket shelves which were emptied when Mugabe ordered price cuts in 2007 have largely restocked with imported goods, most people cannot afford to buy goods due to low levels of income.Government workers, who form the bulk of the employed, earn an average $150 and struggle to pay for food, transport and accommodation. The government is facing rising pressure from state employees, with doctors boycotting work and demanding wage increases, while teachers have threatened to strike when the new school term starts in September.The CSO attributed the July increase to a jump in transport costs and the price of food and non-alcoholic beverages."The month on month food and non-alcoholic beverages inflation stood at 0.23 percent in July 2009, gaining 1.49 percentage points on the June rate of -1.26 percent," the CSO said.The government has made economic recovery its top priority but Western donors, seen as key in funding reconstruction, are demanding broad political and economic reforms before providing aid.The southern African country experienced a severe humanitarian crisis last year, highlighted by a cholera outbreak which killed almost 4,300 people from nearly 100,000 cases.On Wednesday, the UN resident humanitarian co-ordinator Agostinho Zacarias warned that the crisis was far from over."Other areas of vulnerability also need to be urgently addressed as Zimbabwe's overall humanitarian situation remains serious," Zacarias said at a ceremony to mark the first World Humanitarian Day in Harare."Projected needs ... include an estimated 2.8 million in need of food aid at the peak of the 2009/10 lean season." (Reporting by Nelson Banya)

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