Zimbabwe inflation slows to 4.1 pct y/y in July

Mon Aug 23, 2010 1:38pm GMT
HARARE Aug 23 (Reuters) - Zimbabwe's annual inflation fell to 4.1 percent year-on-year in July from 5.3 percent in June, driven down by a drop in the cost of food and non-alcoholic beverages, official data showed on Monday.

Zimbabwe, whose inflation peaked at 500 billion percent in Dec. 2008 according to IMF data, has stabilised its economy under a coalition government set up last year by bitter rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai.

The price of food, which constitutes 30 percent of the consumer price index basket, has stabilised over the last year thanks to a better agriculture output.

The Zimbabwe National Statistical Agency said month-on-month inflation was -0.1 percent in July, unchanged from June.

Finance Minister Tendai Biti has projected that inflation would end the year at 4.5 percent, against a previous government forecast of 5.1 percent, although some analysts see a higher figure.

The government abandoned use of the Zimbabwe dollar last year after hyperinflation rendered it worthless and now uses the US dollar and South African rand. (Reporting by Nelson Banya; editing by Patrick Graham)