Basic food prices soar

HARARE - Prices for basic food items have risen by an average 70% over the past week, despite frantic government attempts at imposing price controls on basic commodities such as maize meal, cooking oil and bread.
It could no longer resist the pressure for increases from businesses, who have seen

their costs rise sharply as the value of the local currency has plummeted.
Since January, the Zimbabwe dollar has lost more than 200% of its value against the US currency on a thriving parallel market, and to defend it the Reserve Bank of Zimbabwe tightened monetary policy by raising duties on most imported items to 100%.
While government tried to claim that inflation for the month of June slowed down by 9 percent, consumers are witnessing a fresh wave of price increases for basic commodities.
Bread shot up by 75% at the weekend, rising from the previous Z$130,000 per loaf to around $210,000. Commuter fares followed suit on the back of increases in the price of fuel, which rose from between $200,000 to $220,000 in May between $400,000 and $450,000 by end of June before rising recently to $500,000 per litre.
A trip to Kuwadzana is now attracting a fare of $150,000, while a trip to Chitungwiza now costs $200,000 from $150,000.
Businesses around the country have been trying to put pressure on President Mugabe’s Government, which, they say, is slowly bleeding the economy to death.
The government last week granted the Zimbabwe Electricity Supply Authority permission to raise tariffs by an average of 100% after a two-month wait.
Players in the various industries have accused government of delaying the gazetting the legal prices exposing them to the cost-push effects of hyperinflation.
The increases comes just days before the Finance Minister Herbert Murerwa is set to announce the mid-term Fiscal Policy review for 2006. Consumers are expecting an adjustment on the tax-free income threshold to levels above Z$15 million as the economic recession continues. – Own correspondent

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