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Africa
US dollar eases Zimbabwe inflation
Figures show slight fall in consumer prices in economy beset by hyper-inflation.
Last Modified: 03 Apr 2009 22:27 GMT
Hyper-inflation has destroyed the value
of Zimbabwe's own currency [EPA]

Zimbabweans have seen a slight fall in the price of everyday items since the government allowed shops to abandon the local currency in favour of the US dollar, government figures indicated.

The data showed consumer prices fell in the first two months of the year, media reports on Friday said, raising hopes that there could be an end to the country's rampant hyper-inflation.

Data from the Central Statistical Office showed inflation at -3.1 per cent on a monthly basis in February and -2.3 per cent in January.

The last time official figures showed a month on month fall in inflation was in mid-2005.

The 2009 figures were the first using US dollars so there was no annual comparison and analysts remain cautious.

"Things are slow, we are really struggling to get started," John Makumbe, a political analyst, said.

"The change that the people of Zimbabwe expect is not going to come through easily because basically Zimbabwe doesn't have the money to finance the change processes," he said.

"It is a fact that without some really big money coming into the government of Zimbabwe there will not be any meaningful change, or visible change that will occur because [the country] is clearly bankrupt."

Hyper-inflation has destroyed the value of Zimbabwe's own dollar, but the new unity government of Robert Mugabe, the president, and Morgan Tsvangirai, the prime minister, has raised hopes of rescuing the once prosperous country.

Previous official figures showed inflation at 231 million per cent in July, but economists said it rose far higher.

Tendai Biti, the finance minister, last month projected inflation would fall to just 10 per cent by the end of this year as the use of foreign currency would help to stabilise prices.

US-based Foreign Policy magazine called Biti's comments the "wackiest of all" government claims.

Source:
Agencies
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