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ZIMSTATS Inflation Data Misleading Investors

"The reality is that Zimbabwe inflation is above 800% and ZWL is in hyperinflation" - Tinashe (@babanyenyedzi)

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ZIMSTATS Inflation Data Misleading Investors

In an unprecedented madness, Zimstats announced that inflation in Zimbabwe for September was 18.4% year on year. Exactly the same day the RBZ MPS vowed to continue with ZWL interest rate of 150%.

ZIMSTAT Inflation Figures Too Modest & Misleading

The RBZ measures expose the Zimstats faustian bargain. There are many that questioned Zimstats methods and data production and we defended them only now to reveal just how dangerous they are.

Zimstats new inflation data is dangerous with many economic, accounting and social effects. The primary economic impact is that it lies to investors wanting to come into Zimbabwe what the inflation rate is.

An investor must now accompany their wads of cash with a statistician to first untangle real inflation from the geometric inflation provided officially. Secondly geometric average means ZWL is not losing value- at least on paper.

What will auditors do now in auditing company accounts?

To understand what Zimstats has done let’s illustrate.

Suppose ZWL inflation is 10,000% and USD is 1%. 

By geometric mean, 10000 and 1 = square root of (10000 × 1) = 100

Zimstats will publish inflation rate of 100%

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Arithmetic mean of 10,000 and 1 = 5000.5.

Whereas arithmetic mean inflation is 5000%.

Which one gives a better picture of reality? The reality is that ZWL inflation is 10000% and USD 1%. At least arithmetic mean of 5000% was untrue but still realistic. But what does 100% even mean?

By definition it’s almost impossible to reach hyperinflation according to new Zimstats measure of inflation.

Month on month will have to be 3000% to give the geometric mean of 50% on a month on month basis. Just try and imagine ZWL prices rising by 3000% in one month for Zimstats inflation to be hyperinflation.

ZIMSTATS Inflation Data Misleading Investors

Yet the reality is that Zimbabwe inflation is above 800% and ZWL in hyperinflation.

Geometric mean is mostly used when one wants to establish an average compound growth rate when data has some outlier points. Eg. compounded interest, dividend.

We are in this twilight zone because GOZ is preparing the market for the inevitable. Despite acknowledging that USD is now 80% of the economic activity Zimstats refuses to provide ZWL inflation.

They’re own blended inflation would have shown hyperinflation. So they decided on an even confusing measure.

If GOZ can be this irrational and make economic and accounting principles impossible to audit what more is in store for us?


Person for people. Reader of writings. Writer of readings.

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