Page last updated at 10:57 GMT, Wednesday, 16 September 2009 11:57 UK

Zimbabwe inflation eases further

50 billion dollar Zimbabwean bank note
The Zimbabwean dollar has virtually disappeared from the streets

Zimbabwean inflation slowed again last month, thanks to the lower cost of food and non-alcoholic drinks, the Central Statistical Office (CSO) has said.

The month-on-month rate was 0.4% in August, compared with 1% in July.

While it is the latest indication that Zimbabwe is recovering from the hyper-inflation of 2008, the CSO still does not publish an annual rate.

Last year, Zimbabwe's annual inflation rate soared as high as 231,000,000% as its economy collapsed.

This prompted the CSO to abandon releasing the annual rate every month.

Currency move

The national unity government, formed in February, has since started efforts to both help the economy recover and try to get inflation under control.

While you have to take the figure with a pinch of salt, it is really the only even vaguely reliable source
Philip Walker, Economist Intelligence Unit

One of its first decisions was to allow people to use foreign currencies, a move that has now in effect removed the worthless Zimbabwean dollar from circulation.

Analyst Philip Walker of the Economist Intelligence Unit, said the CSO's latest inflation data appeared to be broadly accurate.

"While you have to take the figure with a pinch of salt, it is really the only even vaguely reliable source," he said.

"Zimbabwean inflation is certainly not at the level seen this time last year ago... the fact they have abandoned the Zimbabwean dollar has certainly helped."

IMF loan

Earlier this month, the International Monetary Fund said it would give Zimbabwe a $400m (£241m) loan to boost its cash reserves.

However, political tensions remain in the government between President Robert Mugabe's Zanu-PF party and Prime Minister Morgan Tsvangirai's Movement for Democratic Change.

Mr Tsvangirai has said his party members continue to face violence and intimidation.

Commentators say this political instability will continue to deter badly-needed overseas private investment.



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