Prof Hanke is offside on inflation -Analysts

Staff Reporter

Economic analysts have accused American economist, Professor Steve Hanke of lying about Zimbabwe’s inflation levels in a bid to cause mayhem in the country.

Local economists greatly disagreed with Prof Hanke’s assertion that Zimbabwe’s inflation levels were now the highest in the world.

One economist who preferred anonymity said Prof Hanke was not being truthful and it was obvious that he wanted to portray Zimbabwe as a failing economy.

“Prof Hanke is not being truthful. To say that Zimbabwe’s inflation was now the highest in the world is surely a joke of the century. A country with the highest inflation levels cannot have peace and stability currently being witnessed in Zimbabwe. It’s like Prof Hanke is on a mission to portray Zimbabwe as a failed economy,” said the analyst.

The same analyst added that Prof Hanke was measuring the country’s inflation levels using the Purchasing Power Parity (PPP) formula which was not accurate.

“If Prof Hanke is using PPP to measure the country’s inflation levels, then the results will be wrong. If he wants to get the correct inflation levels, he should use the Consumer Price Index (CPI), which measures the percentage change in the price of a basket of goods and services consumed by households,” added the analyst.

Another analyst said that as much as prices of goods and services in the country were gradually increasing, that doesn’t mean that the inflation level is now at 189 percent per year as claimed by Prof Hanke.

In 2019, Minister for Finance and Economic Development, Professor Mthuli Ncube also accused Prof Hanke of wrongly calculating the country’s inflation levels. At that time, Minister Ncube said that Prof Hanke was wrong in his calculations as he was using the Old Mutual Implied Rate (OMIR) to gauge inflation. Prof Ncube argued that the OMIR distorts the rate as share price has an equity risk premium built into it.