Zimbabwe projects historic single-digit inflation by early 2026

Zimbabwe is on track to achieve single-digit local currency inflation by the first quarter of 2026, a milestone not reached since 1997, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube has announced.

Presenting the 2026 National Budget in Parliament on Thursday, Minister Ncube expressed optimism about the country's economic outlook, forecasting inflation to fall to around 10 percent before the end of the year, setting the stage for a historic drop into single digits early next year.

"And if this happens, Mr Speaker, Sir, that would be the first time that we will have achieved that kind of single-digit domestic inflation since 1997," he said.

The Minister attributed the anticipated decline to anchored inflation expectations, currency and exchange rate stability, and strengthened coordination between monetary and fiscal policies. He highlighted the recent sharp drop in annual inflation to 19 percent in November 2025 from 82.7 percent in September, marking the lowest level since December 2023.

"Sustained deceleration in ZiG inflation in 2025 implies broad price and exchange rate stability, laying a strong foundation for single-digit inflation and macroeconomic stability in 2026 and beyond," he said.

Minister Ncube pointed to prudent fiscal policy, tight monetary measures, proactive money supply management, and a favourable agricultural season as key drivers of price and exchange rate stability. He noted that foreign currency inflows from exports, particularly tobacco, gold, and platinum, further reinforced economic stability.

Economic analyst Reginald Shoko explained that aligning fiscal and monetary policies while supporting agriculture and currency stability creates a powerful anti-inflationary effect. "A bountiful agricultural harvest boosts food supply and directly reduces key consumer price index components. Simultaneously, a stable exchange rate prevents imported inflation by making foreign goods, fuel, and inputs cheaper," he said.

Zimbabwe National Chamber of Commerce (ZNCC) Matabeleland Chapter past vice-president Louis Herbst described the Minister's projection of an average annual inflation of 12.1 percent as realistic, balancing aspiration with practical considerations. He emphasized that maintaining policy discipline, tight money supply management, and exchange rate stability are crucial to achieving these targets.

Herbst also cautioned that regional and global economic pressures, including international trade tensions and South Africa's deteriorating relations with the United States, could influence domestic inflation. "Any knock-on effects on trade flows, investment sentiment, or regional currency dynamics could influence domestic inflation, even if internal policies remain sound," he noted.

Despite these challenges, analysts remain cautiously optimistic that Zimbabwe's economy is on course for a significant reduction in inflation, offering hope for improved macroeconomic stability and enhanced business and consumer confidence in 2026.