Page last updated at 13:15 GMT, Wednesday, 16 July 2008 14:15 UK

Zimbabwe inflation at 2,200,000%

Zimbabwe $10m note
New bank notes have been issued to cope with soaring prices

Zimbabwe's annual rate of inflation has surged to 2,200,000%, official figures have shown.

The figure is the first official assessment of prices in the troubled African nation since February, when the rate of inflation stood at 165,000%.

Zimbabwe, once one of the richest countries in Africa, has descended into economic chaos largely blamed on the policies of President Robert Mugabe.

Mr Mugabe was re-elected last month in a controversial one-man race.

The opposition party, the Movement for Democratic Change (MDC), pulled out of the run-off election, saying its supporters were being attacked and killed.

This situation is not sustainable. There's going to be some sort of implosion
Rejoice Ngwenya, economist

Rising costs are forcing retailers to increase prices a number of times a day for goods purchased with billion dollar bank notes and the number of people falling into poverty is on the rise.

In May, the central bank issued a 500m Zimbabwe dollar banknote, worth US$2 at the time of issue, to try to ease cash shortages amid the world's highest rate of inflation.

This is in stark contrast with the situation at independence in 1980 when one Zimbabwe dollar was worth more than US$1.

Mr Mugabe denies that he is ruining the economy, laying the blame on international sanctions he says have been imposed against Zimbabwe.

The US and the EU have imposed targeted sanctions, such as a travel ban and an assets freeze, on Mr Mugabe and his close allies.

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