June 6, 2009 / 9:12 AM / in 8 years

DR Congo inflation at 74 pct

2 Min Read

KINSHASA (Reuters) - Democratic Republic of Congo's annualised inflation stood at 74 percent by the end of May, down from a peak of 121 percent earlier this year, the country's central bank governor said on Friday.

Governor Jean-Claude Masangu said inflation could be brought down to a revised target of 31 percent by the end of the year. The country's foreign reserves took at $205 million, the equivalent of one and a half weeks of imports, he added.

Congo's economy, heavily dependent on revenues from its copper and cobalt mines, has been hit particularly hard by the economic crisis, with demand for resources drying up, leading to a slide in the Congolese franc.

"There is a major drop (in inflation) ... The way things are going, it's entirely possible to reach the end of year figure of 31 percent," Masangu told journalists in Kinshasa.

The 31 percent figure is twice the rate forecast when the 2009 budget was first prepared.

The figure for reserves includes $200 million of emergency funds disbursed by the International Monetary Fund earlier this year to shore up the country's economy.

Congo's budget minister warned last month that the country would have to revise its 2009 budget if it was unable to rein in rampant inflation and reverse the slide of its currency.

In March, the IMF slashed Congo's growth forecast to 2.7 percent, down from an October projection of over 10 percent.

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