Tapiwanashe Mangwiro
ZIMBABWE’S annual inflation steeply declined to 32,7 percent in October from 82,7 percent a month earlier as the effects of the 2024 currency devaluation finally eased and ZimGold (ZiG) continued to show stability.
The Zimbabwe National Statistics Agency (ZimStat) said prices increased by an average of 32,7 percent between October 2024 and October 2025, a marked drop from the high figures recorded earlier this year.
The sharp moderation follows six consecutive months of disinflation, reflecting the gradual pass-through of exchange rate stability and tight monetary policy by the Reserve Bank of Zimbabwe (RBZ).
The slowdown in inflation comes just over a year after the RBZ’s 46 percent devaluation of the local currency in September 2024, a move that temporarily increased inflation as prices adjusted to the weaker exchange rate.
For months after the adjustment, inflation remained elevated, averaging above 90 percent between May and August 2025, as the market priced in the higher cost of imports and inputs.
However, with exchange rate pressures now subsiding and ZiG gaining acceptance across key sectors, inflationary pressures have eased.
Data shows a steady disinflation trend from a peak of 95,8 percent in July to 93,8 percent in August, then 82,7 percent in September, before plunging to 32,7 percent in October.
Economist Dr Prosper Chitambara said the latest figures confirm that the currency realignment shock has largely passed, allowing real sector stability to take hold.
“We are seeing the effects of exchange rate pass-through wearing off, and this is now a reflection of tight liquidity management and reduced speculative demand,” Dr Chitambara explained.
“The October figure shows that ZiG is finally holding its ground and that monetary policy is biting where it should.”
RBZ Governor Dr John Mushayavanhu insists that inflation will end the year below 30 percent before further moderating to around 20 percent in 2026.
“Our inflation outlook remains positive,” said Dr Mushayavanhu at a recent post-Monetary Policy Committee briefing.
“The transition to ZiG pricing was naturally associated with temporary distortions, but with fiscal restraint and continued exchange rate stability, inflation will continue to ease into 2026.”
The October outturn places the central bank within touching distance of its annual target.
Economist Mrs Tinashe Muringi believes sustaining the trend would require discipline in public spending and import management.
“The major risk to continued disinflation lies in fiscal policy,” she said.
“As long as Government keeps expenditure under control and avoids monetisation of deficits, inflation should comfortably stay below 30 percent by December.”
ZimStat also reported that month-on-month inflation fell further into negative territory, shedding 0,2 percentage points to -0,4 percent in October from -0,2 percent in September.
This indicates that prices slightly declined between September and October.
The negative reading suggests that domestic prices are stabilising and that deflationary forces, particularly in non-food items, are beginning to emerge.
The month-on-month food and non-alcoholic beverages inflation rose modestly to 0,7 percent in October, up from 0,2 percent in September, while non-food inflation fell deeper to -0,9 percent from -0,5 percent in the same period.
The divergence between food and non-food inflation, Dr Chitambara said, highlights the balance between supply factors and monetary policy effects.
“Food prices are responding to seasonal availability and imported cost dynamics, while non-food inflation is reflecting the stability of the currency and dampened consumer demand.”
Analysts say the sharp disinflation demonstrates that the RBZ’s ongoing tight liquidity policy and controlled money supply growth are beginning to yield results.
Since the introduction of ZiG, the central bank has closely monitored liquidity injections, limited quasi-fiscal activities and maintained oversight on the interbank market.
The combination of fiscal restraint, restrained credit growth and improved agricultural output has also helped contain demand-driven inflation.
Mrs Muringi added that consumer confidence and business sentiment are slowly recovering, though caution remains among manufacturers still adjusting to ZiG pricing structures.
“We are seeing firms adjusting their pricing models, now benchmarking more in ZiG rather than foreign currency,” she said.
“Once confidence builds, the multiplier effects on production and employment could further stabilise prices.”
Risks
Despite the progress, global commodity prices, particularly fuel and grain, remain potential inflation risks.
With Zimbabwe still heavily reliant on imports, any global price shocks could reverse part of the gains made.
However, analysts say the country’s improved forex retention framework could cushion the economy from sudden external shocks.
Dr Chitambara said maintaining exchange rate stability will be central to sustaining low inflation.
“The currency is the backbone of price stability. As long as the RBZ keeps the interbank market transparent and avoids excessive money creation, inflation will continue to moderate,” he said.
The October data marks a turning point for Zimbabwe’s price stability efforts.
From the turbulence that followed the 2024 devaluation to the current signs of recovery, the RBZ’s path appears to be gradually vindicating its policy stance.
While the journey to single-digit inflation remains distant, the sharp deceleration of annual inflation to 32,7 percent provides a strong signal that structural reforms, especially in monetary and fiscal coordination, are gaining traction.
If the current trend persists, Zimbabwe could close 2025 with one of its lowest inflation readings in over five years, setting the stage for a more predictable macroeconomic environment heading into 2026.
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