By : Lloyd Mahachi

Zimbabwe’s inflation rate skyrocketed in January in both the U.S. dollar and local currency Zimbabwean Gold (Zig), driven by food and housing prices within the Country.

In dollar terms, inflation accelerated to 14.6% year on year after rising by 2.5% in December last year. On a local currency basis, inflation rose to 10.5% month on month in January compared to an increase of 3.7% in December, statistics agency data showed on Tuesday.

Independent economist Prosper Chitambara said last year’s severe regional elnino induced drought and additional taxes introduced this month had likely contributed to the inflation increase.

“It could be the new taxes that have taken effect this month. The huge cost is passed on to consumers. Before the next harvest season we are likely to see an upward trend of inflation as drought continues to exert inflationary pressures,” Chitambara said.

In his latest budget Finance Minister Mthuli Ncube introduced a 0.5% tax on fast food and a 10% tax on all sports betting proceeds, which took effect this month. The introduction of these taxes caused a panic in the sectors to be affected.

Another independent economist, Tony Hawkins, said U.S. dollar inflation had been “grossly understated” and authorities in the Southern African country were playing catch-up.

The inflation rise sparked worries about the country’s economic stability, especially within citizens who are already struggling to cope with expenses.

Editor : Josephine Mahachi