Gono predicts inflation will fall to 20 percent

Gono predicts inflation will fall to 20 percent

GONO

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By Staff Reporter

ZIMBABWE'S central bank chief Gideon Gono on Wednesday said inflation, which peaked to more than 600 percent a year ago, would fall to between 20 and 35 percent this year and to a single digit in 2006.

"In 2005, the inflation rate is projected to continue to decline steadily through the year to end between 20 and 35 percent," Gono said while reviewing the economic policy for the last quarter of 2004.

He said inflation had plummeted to "132.6 percent in December from a peak of 622.8 percent in January," but stressed that despite this breakthrough, Zimbabwe still had the world's highest inflation rate.

Gono had been appointed in 2003 to nurse the once-model economy, now plagued by high unemployment, poverty, crippling inflation and a free-falling currency, back to health.

He said the outlook on growth was positive for the first time in years.

Gono said growth this year was "projected at between three and five percent from a 30.7 percent cumulative decline over the years 2001 to 2004."

The Reserve Bank governor however warned of a crackdown on those state-run companies which are overstaffed, with poor productivity levels and prone to increasing prices at the drop of a hat.

"To date, most parastatals have been a drag to our turnaround efforts and a source of misery to both households and the economy as a whole.

"The time is now to reject non-performers at all parastatals ... and to put a stop to their perpetual dependence on unnecessary price hikes to consumers," he said. - AFP
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