INFLATION RATE IS UNDER THE INFLUENCE OF AN ARTIFICIAL ECONOMY
….and that is why the cost of living is still escalating – Dr Fred M’membe
LUSAKA, Monday, June 13, 2022 (Smart Eagles)
Let’s not be excited that inflation rate is going down, leader of the opposition Socialist Party Zambia Dr Fred M’membe has warned Zambians.
Dr M’membe has explained the reason inflation rate is seemingly going down while the cost of living is escalating. He said the performance of the inflation rate is based on what he termed as the artificial economy and not the real one.
The opposition leader disclosed this when he featured on Diamond TV Zambia’s “COSTA” yesterday.
“Any student of political economy, not just mere economy will tell you that we have two economies. There is the real economy, that is based on the goods being produced. There is what we call, for lack of a better term, an artificial economy that just deals with the exchanging economies and you make money,” he said.
“Today you can incorporate a company saying there is uranium found in Chongwe. And that company starts to sell shares because they believe that the grade of uranium is very high in Chongwe that you have found. You list that on the stock exchange, it will start to make money. It may take Ten years to actualize that project but shares are being exchanged. No production at all.”
The opposition leader explained that what is being seen with the figures of inflation is not coming from the production of goods or services being traded.
Dr M’membe said the figures are coming out of simply playing with monetary issues.
“Then later on in the Ninth or Eighth year, they realize that actually the grade of the uranium you are talking about in Chongwe is of low quality. So that project will not take place. You had all this economy that you created, all these business, people are making money from the artificial economy. What you are seeing with the figures of inflation is not coming from the production of goods or services being traded. It’s coming from simply playing around with monetary issues,” he said.
“Demand and supply, you reduce it. You suppress a bit of demand from the Kwacha, from the Dollar and so on. That pushes the exchange rate a bit lower. That also helps lower inflation and so on. Have you reduced the cost of living? No. are prices really coming down? Have prices really been coming down the way the rate of the inflation rate is coming down? Or prices have been going up? On the real economy, prices have been going up.”