Inflation reaches 333 percent

The economic situation in the DRC will continue to deteriorate until the government reverses some of its more “disastrous” economic policy decisions, the EIU said in its quarterly report. Official attempts to control market operations “by diktat” - including the ban on foreign-currency holdings and the fixing of the exchange rate at unrealistic rates - would continue to “backfire spectacularly”, it said. Shortages of basic goods were expected to worsen. Importers and domestic traders who supply Kinshasa were being increasingly hindered by these policies and were either withdrawing from the market or resorting to expensive and risky attempts at evasion, it said. Meanwhile, annual inflation rate rose to 333 percent in 1999 from 147 percent in 1998, the report said, citing estimates from the US embassy in Kinshasa.