Zimbabwe set for historic single-digit inflation rate

Zimbabwe is on the cusp of a historic economic milestone as the country's inflation rate is projected to fall to its lowest level since 1997, signalling a potential turning point in Government efforts to restore macroeconomic stability.

In an interview with The Herald, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said the Government expects to achieve single-digit year-on-year inflation in the first quarter of this year—a feat not seen in nearly three decades.

"We should, in the first quarter of this year, be able to reach a single-digit inflation year-on-year in ZiG. And that will be the first time we have seen this kind of inflation level since, I don't know, 1997," Prof Ncube said.

The minister attributed the projected decline to the success of tight fiscal and monetary coordination aimed at stabilising prices, strengthening the local currency, and restoring confidence in the economy. Zimbabwe's economic challenges date back to the late 1990s, marked by rising inflation, currency volatility, fiscal deficits, and shrinking production. The situation worsened in the 2000s, when the country experienced some of the highest inflation rates in the world following sanctions from the United States and Western nations.

Achieving single-digit inflation, Prof Ncube said, would signal a return to price stability, provide planning certainty for businesses and households, and lay a stronger foundation for sustainable economic growth.

The minister also provided the outlook for 2026, with Treasury projecting economic growth of 5 percent—slightly below the 6.6 percent recorded in 2025 but sufficient to sustain momentum. "For 2026, again we are determined as a Government to make sure that we deliver on the growth that came through last year and we continue. We're expecting a growth rate of 5 percent," he said.

Prof Ncube emphasised that the Government's top priority for 2026 is maintaining macroeconomic stability through disciplined fiscal and monetary management. On the fiscal side, Treasury plans to keep the budget deficit within 0.5 percent of Gross Domestic Product, avoid using the Reserve Bank overdraft facility, and manage public debt levels. On the monetary side, the Reserve Bank will control money supply growth, maintain positive real interest rates, and manage liquidity to support currency stability.

The strategy, he noted, is already yielding results. Export earnings have reached a record US$16.2 billion, the highest in the country's history, while the country is running a current account surplus of just over US$1 billion. "All that is very supportive of currency stability and overall stability," Prof Ncube said.

The 2026 Budget, he added, will balance stability with investment to support key economic pillars. Agriculture remains a top priority, with programmes targeting infrastructure development, fertiliser provision, and irrigation investment. Treasury has allocated the equivalent of US$500 million, or ZiG14 billion, for infrastructure projects including roads, dams, and related initiatives.

Human capital development, housing, and social infrastructure will also receive significant funding. "On human capital development, the same. Housing support, the same," the minister said.

Prof Ncube concluded that the 2026 Budget aims to maintain stability while supporting growth-enabling investments: "So the Budget of 2026 must support the key levers, key pillars of the economy, in addition to maintaining stability."

This projection of single-digit inflation and strategic economic planning marks Zimbabwe's most significant step toward macroeconomic normalisation in decades.