Zimbabwe says US dollar prices falling

HARARE (AFP) – Zimbabwe officials said Tuesday that consumer prices fell at the beginning of the year, in the first sign that a switch to the US dollar has tamed the devastating hyperinflation of recent years.

The last official assessment of Zimbabwe's inflation in July last year put the rate at 231 million percent, a figure that independent economists saw as a gross understatement.

But the Central Statistical Office said it had stopped calculating inflation in Zimbabwe dollar terms since January, when the government legalised the use of US dollars and South African rands for all trade.

Since that decision, the Zimbabwe dollar has disappeared from the streets. The central bank had been printing ever larger denominations into the trillions every few weeks, meaning even small purchases required staggering sums.

The statistics office said all inflation calculations would now be based in US dollars, and by that measure, prices have been declining all year.

"Prices as measured by the all-items consumer price index decreased an average of 3.1 percent from January 2009 to February 2009," the agency said.

"The month-on-month inflation rate in February was -3.1 percent, shedding 0.8 percentage points on the January rate of -2.3 percent," it said.

Last week Finance Minister Tendai Biti said that by the end of year, annual inflation would be below 10 percent.



Credits: AFP/File – A shopper uses a bundle of Zimbabwean dollars to buy a handful of fresh tomatoes in Harare. Zimbabwe …