Zimbabwe monthly inflation at -1.1 pct in April

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HARARE, May 29 (Reuters) - Zimbabwe recorded a monthly inflation rate of -1.1 percent in April as prices fell at a slower rate than in March, months after the country discarded its worthless currency and allowed use of multiple currencies.

Inflation had become the clearest sign of a debilitating economic crisis in the southern African country after rising to 231 million last year, forcing the government in January to allow citizens to use foreign currencies in a bid to halt rocketing prices.

The Central Statistical Office said on Friday food and non alcoholic beverages had fallen at a slower rate than the previous month. Monthly inflation stood at -3.0 percent in March.

The CSO is not releasing annual inflation data.

Economic analysts say the economy is showing signs of stabilising after a decade of decline, but remains strained by foreign currency shortages.

A new unity government formed by President Robert Mugabe and Prime Minister Morgan Tsvangirai in February says it needs $8.3 billion for the economy to fully recover, end high levels of unemployment and revive collapsed industries.

But major foreign donors, while acknowledging some progress by the new administration, remain unwilling to release any funding, insisting on political reforms, reversal of nationalisation laws and an end to farm invasions.

Analysts warn that the government may find itself under pressure if it does not quickly deliver on expectations although it has managed to get schools opened, hospitals functioning again and shops are now stocked with basic goods.

Government employees, who constitute the majority of workers, earn a monthly allowance of $100, better than their previous Zimbabwe dollar salaries but still far short of the $462 they are seeking.

Electricity shortages remain while bad roads are a hazard to motorists and some suburbs still go without water, a potential source of another major outbreak of cholera, which has already killed more than 4,200 people.