Inflation in Zimbabwe surged in January, rising by 14.6% in U.S. dollar terms and 10.5% in local currency on a year-on-year basis.
Independent economist Prosper Chitambara attributed the inflationary spike to increased taxation and the lingering effects of a regional drought last year, which has driven up food prices.
As part of its latest budget, the Finance Ministry introduced new taxes, including a 0.5% levy on fast food and a 10% tax on sports betting proceeds, both of which took effect this month.
Zimbabwe introduced a gold-backed currency in April 2023, but it suffered a sharp devaluation in September. Despite this, the majority of local transactions still rely on foreign currencies, primarily the U.S. dollar.
Since its devaluation, the Zimbabwe Gold currency has continued to decline, trading at approximately 26.3 to the U.S. dollar as of Tuesday, according to the central bank’s website.
(AP)