ADDIS ABABA, November 20 - Ethiopia has recorded a fourth straight month of deflation with an annual negative inflation rate of 3.7 percent in October on falling food prices, the government said on Friday, according to Reuters.

Inflation in the vast Horn of Africa nation hit a high of 64.2 percent in July 2008, driven by record high food and fuel prices, but it has fallen every month since.

"The main reason for the decline in General Consumer Price Index in October 2009 is the fall in the prices of food components especially cereal," the Central Statistical Agency said in a statement, adding that prices of non-food items had increased.

Ethiopian Prime Minister Meles Zenawi has said that a halt to government borrowing and a rise in bank reserves has also underpinned the steadily declining rate in sub-Saharan Africa's second most populous nation.

Ethiopia's central bank has instructed private banks to restrict borrowing as part of the attempts to curb inflation.

The global recession has slashed international demand for Ethiopia's agricultural exports and power cuts have ravaged business, fuelling a foreign currency shortage.

Source: Reuters