"This means that on average, goods and services normally purchased by households for final use in Zimbabwe were about 13 times as expensive in May 2006 as they had been 12 months before," he told a news conference in Harare.

A bundle of goods and services priced at 100,000 Zimbabwean dollars a year ago cost more than one million dollars in May.

Items that showed the highest year-on-year increases were medical services (11,029.9 percent), postal services (5,180.4 percent) and hairdressing (4,665.6 percent).

Month-on-month the highest increases were in paramedical fees (7,500.7 percent) and medical fees (1,042.7 perecent).

Zimbabwe's inflation rate crossed the 1,000-percent threshold to reach a world-record high of 1,042.9 percent in April.

It set off a spate of price increases.

The cost of bread went up by more than 50 percent to 130,000 Zimbabwean dollars (1.2 US dollars) while public transport fares doubled.

At the beginning of June, the central bank issued a new 100,000-dollar banknote four months after unveiling another currency denomination.

Reserve Bank Governor Gideon Gono has said the central bank "will not hesitate to introduce higher denominations".

Independent economic analyst Daniel Ndhlela said the inflation rate would continue to soar "as long as the factors driving it are not addressed".

He attributed the inflation spiral to the free printing of currency and a controlled exchange rate which has spawned a flourishing parallel foreign currency market.

"One of the major drivers of inflation is inflation so it's not a surprise that inflation has risen again after the April jump in annual inflation," respected economist analyst Eric Bloch said.

Bloch said central bank chief's forecast that inflation will begin to decelerate in June was "a bit optimistic".

"It will probably begin to come down in August," he said. "In the meanwhile, for the low income earners, the hardships will continue."

Gono had warned in January that inflation would peak at over 800 percent in March before receding to below 500 percent in June and declining to double digits next year.

An economic analyst with a leading finance company warned last month: "Current inflation is nearer 1,500 percent to 2,000 percent, which means the value of money halves in two weeks."

The Consumer Council of Zimbabwe said in a statement earlier this week that the cost of living for a family of six was 49 million Zimbabwean dollars in May, while the average worker earns less than 20 million dollars.

Zimbabwe is in the throes of an economic crisis, characterised by spiralling inflation, soaring poverty levels, an unemployment rate hovering at over 70 percent and chronic shortages of fuel and basic goods.

More than four million of Zimbabwe's 13 million inhabitants also face food shortages, according to United Nations agencies.

Workers are resorting to skipping meals and walking or cycling long distances to work because the prices of basic goods are continuing to soar but wages are remaining stagnant.

-by Fanuel Jongwe