July 16, 2008 / 11:55 AM / 11 years ago

FACTBOX: Zimbabwe's economy in freefall

(Reuters) - Zimbabwe’s annual inflation rate, already the highest in the world, has hit 2.2 million percent, central bank Governor Gideon Gono said on Wednesday.

Here are some details on Zimbabwe’s inflation milestones and government efforts to control it.

INFLATION’S RISE:

— Zimbabwe’s annual inflation rose above 1,000 percent in April 2006. Official statistics showed the annual inflation rate at a record 1,042.9 percent after 913.6 percent in March.

— Annualized inflation stood at 3,713.9 percent in April 2007, a monthly rate of increase of 100.7 percent, according to official government data.

— Inflation slowed in August to 6,592.8 percent from 7,634.8 in July after a price freeze was instituted, but leapt to a record 7,982.1 percent in September.

— The December 2007 figure had risen to 66,212.3 percent, and by January 2008 it hit 100,586 percent but economic experts said the actual figure was higher.

— April 2008, the Central Statistics Office reported that in February 2008, the figure stood at 164,900.3 percent.

— In July 2008 the Central Bank Governor said it is now at 2.2 million percent. Gono said that some independent economists say inflation is 7 million percent annually but the CSO (Central Statistical Office) says 2.2 million percent.

REACTION:

— When inflation hit 1,000 in 2006, Zimbabwe was in its eighth year of recession and had the fastest shrinking economy outside a war zone, according to the World Bank. It also had the highest inflation rate in the world.

— The Reserve Bank of Zimbabwe (RBZ) ordered redenominated notes in July 2006 to combat black marketeering and hyperinflation, lopping three zeros off the local dollar.

— The government instituted a price freeze in June 2007, followed two months later by wage freeze.

— The RBZ introduced new higher value banknotes early in 2008 which, however, failed to ease a cash shortage that has kept commercial banks busy with long queues of desperate residents wanting to withdraw money.

* HOW BAD CAN IT GET?

— The United Nations Food and Agriculture Organization and World Food Program estimated in a report last month that 2.04 million Zimbabweans risked hunger in the coming months, “peaking at about 5.1 million at the height of the hungry season between January and March 2009”.

— The report saw maize output in 2008 falling 28 percent from 2007 to 575,000 tonnes and domestic cereal supply down 40 percent at 848,000 tonnes.

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