However the move exacerbated shortages, leaving shop shelves empty.

 

The restrictions were eased on Wednesday.

   

Tony Hawkins, of the University of Zimbabwe, said inflation was likely to accelerate further - to as much as 10,000 per cent by the end of year - as a result of the government's softening stance on prices.

   

"The gradual relaxation of price controls, coupled with the explosive growth in money supply as well as the movement in the exchange rate on the parallel market all point to an upsurge in inflation around September," Hawkins said.

   

"I'd be surprised if they can keep it below 10,000 per cent by the end of the year."

    

Zimbabwe's official Herald newspaper reported on Wednesday that Obert Mpofu, the industry and international trade minister, had approved price rises for some food products, farming inputs, beverages, airplane and commuter train fares among other items.

   

The government said businesses could only raise prices by 20 per cent. 

 

A team of price monitors and police were still in place to ensure businesses complied, the newspaper said.

 

Economic crisis

   

Critics blame Mugabe, whose government is facing increased pressure over the economic crisis, for ruining one of Africa's most promising economies.

   

Mugabe, in power since independence from Britain in 1980, has accused some businesses of raising prices without justification as part of what he calls a Western plot to remove him.

   

The leader has warned his government would seize companies that he accuses of undermining his rule.

   

More than 7,500 business people have been arrested and fined for breaching the price controls, which analysts say have worsened the economic situation.

   

Zimbabwe's parliament - in which Mugabe's Zanu-PF party has a technical two-thirds majority – is to consider an empowerment bill that seeks to transfer majority control of firms, including foreign mines and banks, to indigenous blacks.