Zimbabwe's monthly inflation eases to 0.3%

Zimbabwe's month-on-month inflation rate eased to 0.3% in June 2025, shedding 0.6 percentage points from the May figure of 0.9%, according to data released by the Zimbabwe National Statistics Agency (ZimStat). The slowdown is being attributed to continued tight monetary and fiscal policies aimed at maintaining price stability in the economy.

However, despite the monthly decline, annual inflation edged higher to 95% in June, up from the 85.7% recorded in April, when the new domestic currency, Zimbabwe Gold (ZiG), marked its first anniversary. Analysts say this moderate surge in the annual rate reflects the lingering impact of the currency devaluation in October last year, which was aimed at addressing market distortions and improving exchange rate alignment.

ZimStat noted that the housing, water, electricity, gas and other fuels, communication, and transport categories had the largest influence on the monthly inflation trend in June, collectively contributing a 0.3% rise in the consumer price index (CPI) for ZiG-based transactions.

Meanwhile, the US dollar inflation rate remained relatively subdued, registering a 0.2% month-on-month increase, up slightly from -0.3% in May. According to ZimStat, the food and non-alcoholic beverages category had the most notable influence on the USD-based index, contributing a -0.2% change in June.

In broader terms, the Weighted Consumer Price Index, which combines price movements in both ZiG and US dollar transactions, posted a month-on-month inflation rate of -0.1% in June, marking a slight decline from 0.0% in May.

The monthly trend is widely viewed by economists as a more reliable indicator of inflation direction, as the annual rate is a cumulative measure of the preceding 12 months. Sustained low monthly inflation is expected to eventually drag down the annual rate, provided economic fundamentals remain stable.

Harare-based economist Dr Prosper Chitambara welcomed the latest figures, describing them as encouraging signs that current policy measures are beginning to yield results. However, he cautioned that gains must be safeguarded through continued discipline and reform.

"I think we are in the right direction, though we need to sustain the gains that were made," Dr Chitambara said. "We are seeing some measure of stability, but that needs to be sustained through continued implementation of conservative monetary and fiscal policies, and continued enhancement of efficiency in public spending."

He added that the government should expedite institutional reforms in line with recommendations from the International Monetary Fund (IMF) to ensure lasting macroeconomic stability.

Economist George Nhepera echoed similar sentiments, warning that any abrupt depreciation of the ZiG could destabilise prices again. "Our recommendation is that we avoid as a country any unexpected depreciation or devaluation of the currency, which in my view could trigger a sudden rise in inflation and general prices, especially in local currency," Nhepera said.

The Reserve Bank of Zimbabwe (RBZ) has acknowledged that the current elevated annual inflation rate stems largely from the corrective currency devaluation of September 2024, which was necessary to curb parallel market distortions and encourage foreign currency inflows. The move, however, triggered temporary inflationary pressure.

Despite this, the RBZ remains optimistic. It projects that annual inflation will drop to around 20% by the fourth quarter of 2025, underpinned by tight monetary controls, improved market discipline, and increasing confidence in the structured ZiG currency framework.

As the country navigates its complex inflation dynamics, authorities insist that macroeconomic stability and consumer confidence remain top priorities in shaping Zimbabwe's recovery path.