Harare — ZIMBABWE'S inflation rate declined to 6 592.8 percent year-on-year for August, helped by a government blitz on the business sector that forced prices down by 50 percent at the end of June, figures from the Central Statistical Office (CSO) indicated.

The inflation rate receded after initially touching a record high of 7 634.8 percent in July.

Month-on-month inflation slumped to 11.8 percent in August, from 31.6 percent in July.

The CSO said the decline in the inflation rate, likely to bolster government's price control measures that have resulted in widespread shortages in the economy, was due to a sharp slowdown in prices for food and non-alcoholic beverages.

Zimbabwe is currently grappling with its worst economic crisis in history, characterised by runaway inflation, acute fuel and foreign currency shortages that have disrupted the normal functioning of the country's frail economy, and severe food shortages.

Since the government's clampdown on the business sector, commodity shortages have intensified.

It was not immediately clear what basket the CSO had used to come up with the new figures, as most of the basket products are not available on supermarket shelves, from where the CSO gleans its data for compilation of inflation rates.

It could as well be that the CSO had used figures compiled by the government for the prices of most of the products, which are not available on the market.

Despite the slowdown, the inflation rate for August remains the highest in the world.

Before the price blitz, people were quickly converting their Zimbabwe dollars into food or other essential commodities because of the erosion of value caused by the inflationary crisis.

However, because of the current shortages, most people are rushing to the parallel market for foreign currency or to the stock market for shares.

Both the equities and parallel foreign currency markets have outperformed inflation during the past eight months of the year.

Evidently, the inflationary cycle has made it unattractive to hold the local currency when costs of goods and services are increasing on a daily basis, or the goods are unavailable as is the case under the current regime of tight price monitoring.