ZIMBABWE'S annual inflation slowed to 3.97 percent in June, from 4.02 percent in May, due to the easing of transport costs, the national statistics agency said Friday.

Zimbabwe's economy has stabilised over the last three years after a decade-long downturn which saw runaway annual inflation reaching an official peak of 231 million percent before the government stopped counting.

The country dumped the worthless local dollar in favour of the US dollar and other regional currencies in 2009.

Goods that were in short supply or unavailable returned to the shelves, but prices have continued to fluctuate according to the cost of importing.

Zimbabwe relies on imports mainly from neighbouring giant South Africa after the economic meltdown forced factories to downsize, close or relocate to neighbouring countries.