File picture - Kudakwashe Chiveura prepares to catch a cricket he has dug up to eat.(AP Photo/Tsvangirayi Mukwazhi)

Harare - Zimbabwe's annual inflation slowed to 3.97 percent in June, from 4.02 percent in May, due to the easing of transport costs, the national statistics agency said Friday.

The southern African country's economy has stabilised over the last three years, after a decade-long downturn which saw runaway annual inflation reaching an official peak of 231 million percent, before the government stopped counting.

A power-sharing government formed in 2009 between long-time political rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai dumped the worthless local dollar in favour of the US dollar and other regional currencies.

Goods that were in short supply or unavailable returned to the shelves, but prices have continued to fluctuate according to the cost of importing.

Zimbabwe relies on imports mainly from neighbouring economic giant South Africa after the economic meltdown forced factories to downsize, close or relocate to neighbouring countries. - Sapa-AFP