HARARE - Deepening foreign currency shortages in Zimbabwe and spiralling prices of basic commodities threaten the inclusive government's plans to halt a long-running economic crisis, say analysts. The government of national unity had made modest gains in reversing a decade-long economic recession by dumping the worthless ZimdolBut, food prices are beginning to rise again amid a foreign currency shortage. Business people attribute the latest surge in prices to the rise in the price of fuel from US$1,30 to US$1,50 per litre this week.
Analysts are warning that rising food prices and the critical foreign exchange crunch casts doubt on an expected recovery in 2009. “There is a financial crunch, food prices are going up and the government does not have enough to pay for its needs … this has repercussions for economic recovery and inflation,” said an economist at financial services firm Kingdom Holdings.