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IMF: Zimbabwe's inflation could reach more than 100,000 percent

  • Story Highlights
  • Zimbabwe's central bank said it will issue higher denominated bank notes
  • Inflation officially more than 4,500 percent
  • Severe shortages of basic foodstuffs and other vital goods
  • Many city dwellers also struggle with water, electricity and transport shortages
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HARARE, Zimbabwe (Reuters) -- Zimbabweans were reminded on Tuesday that there is only one certainty in their lives. Prices are running wild and there is nothing they can do about it.

Riot police beat stampeding shoppers trying to enter a wholesale store in Harare, Zimbabwe, after a price cut.

The latest bad news came from Mozambique, where an International Monetary Fund official projected the southern African country's year-on-year inflation could reach over 100,000 percent by year end.

Zimbabweans know life is getting tougher. For them, it's just a matter of bracing for more misery and uncertainty every time they are hit with new inflation figures.

"Things are already very bad. I cannot readily find sugar, salt, milk, beef and a lot other things. I spend many days running around, scrounging to get these basics, so obviously I cannot relate to any suggestion that life is going to get harder," said a 30-year-old clothing salesman in Harare.

"How am I expected to relate to such futuristic figures without imagining that such horrendous hardships will mean death for us," he told a Reuters correspondent, a wary eye darting to see if anybody was listening to the conversation.

Like many others, he fears any criticism of President Robert Mugabe could be risky as security forces crack down on dissent.

Grim reality

Thousands of miles away in Maputo, Abdoulaye Bio Tchane, director of the IMF's Africa department, expressed concerns in an interview with Reuters that Zimbabwe's inflation rate could climb above 100,000 percent by the end of the year.

Deeper hardships were beyond the imagination of many Zimbabweans, struggling to cope with empty shelves at stores amid severe shortages of basic foodstuffs and other vital goods.

Many urban residents are also struggling with water, electricity and transport shortages in a country once viewed as southern Africa's breadbasket.

Broken sewage pipes have left almost an unbearable stench around some poor housing estates. High unemployment and rising poverty have broken many Zimbabweans. All this, officially under an inflation rate of over 4,500 percent.

Zimbabwe's central bank said it will issue higher denominated bank notes on Wednesday to help consumers cope with hyperinflation ravaging the country.

But previous measures designed to rescue the economy failed to raise spirits on Zimbabwe's streets. Henry, a Harare newspaper vendor, said his family has not been able to buy any bread in the past week.

"There is very little bread in the shops, and I am sure bread and all the other things will be very, very expensive by the end of the year," he said when asked about the IMF's bleak inflation prediction.

"I don't know what the actual costs will be but I know that I, and the majority of people here, will not be able to afford them."

Political and economic analysts see no end in sight to the economic crisis pressuring Mugabe, who remains defiant, accusing opponents and Western powers of plotting to oust him.

"What is very clear is that the government blitz [on prices] has just pushed the black market deeper into the ground, emptying shelves and making things more expensive, feeding the inflation spiral," John Robertson, a leading Zimbabwean economic consultant and commentator told Reuters. E-mail to a friend E-mail to a friend

Copyright 2007 Reuters. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.

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