The cost of living in Zimbabwe for a family of six has increased both in terms of the US dollar and the local currency, the Consumer Council of Zimbabwe (CCZ) has said.
In July, the cost of living in US dollars increased to US$540.76 from US$434.46 in June while in Zimbabwean dollars, it increased to ZWL$2.69m from ZWL$2.56m.
Rosemary Mpofu, executive director of the CCZ, yesterday said in an interview with Business Times that the value of the US dollar has increased in comparison to the value of the Zimbabwean dollar.
“The United States dollar terms converted at the supermarket mid rate, the basket increased by 24.5% to US$540.76 in July from US$434.46 in June 2023,” Mpofu said.
She said prices in Zimbabwe dollar have increased but at a slower pace when compared to a jump in United States dollar terms.
“The cost of living as measured by the Consumer Council of Zimbabwe’s low income urban earner monthly basket for a family of six increased from the end of June figure of $2.56m to $2.687m by end of July 2023, showing an increase of 4.7%,” Mpofu said.
Despite Zimbabwe’s annual consumer inflation eased sharply to 101.3% in July 2023 from a nearly two and half year high of 175.8% in June, the country is experiencing US$ inflation.
The high prices have forced consumers snubbing big retailers. Instead, they have turned to tuck shops.
According to economist Gift Mugano, the government is to blame for the decline in sales at large retailers because customers are switching to tuck shops instead because they are significantly less expensive.
“The government is losing serious revenue through promoting tuck shops which don’t pay tax. Instead they should leave the shops to peg the prices on their own,” he said.
But the Treasury said United States dollar inflation was under control.
“We have managed to keep the United States dollar inflation under check and we are not worried by those figures.
In case the figures go out of hand, the liquidity management team from the Reserve Bank of Zimbabwe and Treasury will do open market operations interventions which will bring balance to the rising inflation,” Finance and Economic Development deputy minister Clemence Chiduwa said.
He said those who continue to index their prices using the parallel market rates will put themselves out of business as consumers have choices so the United States dollar inflation is for short term and what is critical is for business to adjust.