Zimbabwe's inflation seen dipping to 160%

Zimbabwe's inflation seen dipping to 160%

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By Agencies

ZIMBABWE'S annual inflation figure should decline to 160% by the year end in line with government efforts to tame hyper-inflation in the southern African country, the central bank governor said on Thursday.

"Reserve Bank now estimates that a 2004 year-end inflation out-turn of between 150% and 160% which would be shedding 463 percentage points," Reserve Bank of Zimbabwe (RBZ) Governor Gideon Gono said.

Last year Gono pledged to bring inflation down to 200% by the end of 2004. Inflation reached a peak in January of 622.8%, but has been falling steadily to reach 251.5% in September.

Presenting an analysis of a new monetary policy launched in December last year, Gono warned that the new inflation target would only be achieved if the government avoided supplementary budgets and gratuity pay-outs.

"It is critical that the fiscal side remains vigilant to consolidate the dis-inflation gains made so far," Gono said.

He said it was important to avoid "unplanned benevolent or gratuity payments that are unrelated to current production activities for real economic growth".

The warning comes as parliament is set to pass a bill to pay some 6 000 former political prisoners and detainees gratuities for being incarcerated or detained by former white governments before Zimbabwe's independence in 1980.

It was not clear if Gono was directly referring to the bill, under which the former prisoners are to be given as yet unspecified amounts of money.
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