Zimbabwe monthly inflation at -3.0 % in March

HARARE – Zimbabwe's consumer prices fell for the third straight month in March after the government abandoned its worthless currency, but shortages of foreign currency continued to bite.

The CSO said inflation stood at -3.0 percent month-on-month last month compared with -3.1 percent in February, as food prices fell.

The statistics office did not release a yearly figure.

Zimbabwe has since January allowed the use of multiple foreign currencies to stem hyperinflation that destroyed the value of the Zimbabwe dollar.

Economic analysts expect inflation to fall further after the government ordered state firms, like the national electricity company ZESA and local councils, to reduce their rates.

There was also increased competition among shops, which have now been restocked, while some local manufacturers have started producing goods again.

"Businesses are now competing in a more aggressive market and they cannot afford to charge high prices, because money is scarce," John Robertson, a consultant economist said.

"Other inflationary pressures from council bills and bills from state utilities have been eased after the government intervened and so we are likely to see inflation down until maybe June," he said.

The CSO said an average family of five people needed $461 in March for food, rent and other goods in order not to be deemed poor. The figure stood at $552 in January.  

An average government worker earns only $100 a month.

Zimbabwe is seeking an urgent cash injection of $2 billion to stabilise an economy suffering unemployment above 90 percent and a severe shortage of foreign currency.

Western donors have held back aid, demanding that a new unity government between President Robert Mugabe and Prime Minister Morgan Tsvangirai undertake political and other reforms.