Annual inflation of Zimbabwe declined 1023.3% in September, falling from 1204.06% in August, as per official figures released on October 10, 2006.
The rising inflation is rated as a chief obstruction in the way towards pulling the nation out of 8-year slump, hit by 70% unemployment rate & continuing shortages of fuel, food & foreign currency.
Gideon Gono, governor of central bank of Zimbabwe raised the nation's key lending rate to 500% to prevent rising inflation rate & a critical economic crisis.
Consumer Price Index of Zimbabwe rose by 14.8% in the previous month after an increase of 29.2% in August 2006.
"Hard to see but inflation is expected to rise further unless we see some dynamic or strong actions being taken by the Zimbabwean govt. & society. IMF inflation will cross 4000% in 2007", said an analyst at RNCOS.
Ignored by foreign donors, President Mugabe's govt. has continually relied on local banks to provide money for stabilizing Zimbabwe's budget and for importing farming & food inputs.
Zimbabwe Allied Banking Group's chief economist David Mupamhazdi told Reuters that inflation pressures are still alive as Zimbabwe still possesses high growth of money supply, wage pressures & high expenditures on the part of govt.
Analysts have urged the need to boost agricultural & industrial production for generating foreign currency & therefore, stabilizing prices and have also emphasized that govt. must curb excessive expenditures.
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