HARARE, June 26 (Reuters) – Zimbabwe’s annual inflation rose to 175.8% in June from 86.5% in May, data showed on Monday, exacerbating a pricing crisis ahead of crucial elections.

Month-on-month inflation rose by 58.8 percentage points in June to 74.5%, the Zimbabwe Statistics Agency (Zimstat) said in a media briefing.

Zimstat measures inflation using a ‘blended’ average of both U.S. dollar and Zimdollar prices.

Economists said the government needed to move swiftly to tame inflation, despite its recent monetary and fiscal measures, which failed to build market confidence.

The Zimbabwean dollar has crashed 50% since the start of June, with parallel market rates continuing to soar, reminiscent of the 2008 hyperinflationary period when the country was forced to abandon its currency.

The local currency slumped after the government in late May announced measures to encourage its use – as opposed to the dollar – in a bid to tame inflation.

“We do not need a prophet to tell us that inflation is running away in Zimdollars. Government has lost it. The only way out is to dollarise,” economist Gift Mugano told Reuters.

The southern African country will hold presidential and parliamentary elections on Aug. 23 at a time when Zimbabweans are buckling under economic pressures.

President Emmerson Mnangagwa, who took over from Robert Mugabe in a 2017 military coup, will be seeking a second term.

“The authorities by now should have learnt that the situation requires a fundamental rethink. What effect they are doing is they are destroying the incomes of everyone earning Zimdollar,” Eddie Cross, an economist and top advisor to the president said.

(Reporting by Nyasha Chingono; Editing by Bhargav Acharya and Alex Richardson)