Zimbabwe Business Watch : Week 47
Confusion and fear continue to occupy the minds of the business community.
The pricing commission has ordered the businesses selling imported product must have cleared their shelves by November 22nd. They will then be required to cost future imports at the official exchange rate which is about ZD$30 000 to the US$ at a time when the only currency available is traded as high as ZD$2 800 000:1. This can be compared with the Old Mutual Implied Rate of about ZD$2 600 000:1.
The official CPI suggests that inflation doubled in the month of October and officially is quoted at 14 840%. Money growth is running at over 17 000% and analysts place the real inflation rate at over 30 000%.
Industrial capacity utilization has probably increased slightly as businesses find the courage to interpret the ambiguous rulings on price and profit in a manner which allows for price increases. This figure would probably only stand at less that 15% but, with the new threats of the Price Commission being implemented, it will force more businesses to the wall and reduce industrial production again.
Power cuts become more frequent at a time when Zimbabwe will commence the export of power to Namibia under a special agreement.
New $500 000 and $1 000 000 notes are likely to be introduced early December and all notes below $10 000 will be scrapped.
Ironically, it is imported goods at excessively high prices that adorn supermarket shelves when local factories are largely closed.
