RESERVE Bank of Zimbabwe (RBZ) Governor Dr John Mushayavanhu has reassured markets and consumers that the recent uptick in annual ZiG inflation is a temporary statistical artefact and that the true inflation picture remains favourable.
He projected that annual ZiG inflation will fall below 30 percent by December 31 and head towards single digits in the months that follow, signalling a major boost for purchasing power and investor sentiment.
According to data released by the Zimbabwe National Statistics Agency (ZIMSTAT), year-on-year ZiG inflation rose from 85,7 percent in April to 92,1 percent in May.
Dr Mushayavanhu attributed this rise not to ongoing price pressures but to a base effect stemming from the once-off shock in September 2024, when month-on-month inflation spiked from 5,8 percent to 37,2 percent.
He emphasised that monthly inflation has remained relatively low and stable at less than 1 percent over the last three months, reflecting the success of the central bank’s tight monetary stance.
“The recorded rise in year-on-year ZiG inflation in April and May 2025 is primarily due to the base effect emanating from the once-off spike in month-on-month inflation from 5,8 percent in September 2024 to 37,2 percent in October 2024,” Dr Mushayavanhu said.
“The current trend in annual inflation is expected to continue up to September 2025 and decline thereafter to align with the current low and stable month-on-month inflation.”
The focus on month-on-month figures gives a more accurate view of consumers’ day-to-day experiences and by encouraging businesses and households to concentrate on monthly inflation, the RBZ is providing a more relevant gauge of real-time price dynamics.
Dr Mushayavanhu underlined that the inflation impact from last year’s shock has already been realised and therefore future annual calculations will better reflect the subdued price pressures seen in recent months.
He projected that, from October 2025, “the economy will return to a more stable annual inflation path, with the annual rate significantly declining to below 30 percent by December 31, 2025, and moving towards single-digit levels in the longer-term outlook”.
“The prudent monetary policy management being pursued by the Reserve Bank will engender price, currency and exchange rate stability and continue to support the positive economic trajectory,” he added.
This optimistic forecast arrives as Zimbabwe seeks to attract investment back into key sectors such as agriculture, mining and manufacturing. Stable and predictable inflation is widely regarded as a cornerstone for foreign portfolio flows and long-term project financing.
In addition to its inflation outlook, the RBZ reaffirmed its commitment to maintaining appropriately tight monetary policy. The central bank insisted it would continue calibrating liquidity through instruments such as policy rate adjustments and open market operations.
These measures are designed to preserve low monthly inflation levels while supporting the broader goal of sustainable economic growth. Consumers have already begun to feel the benefits of price stabilisation, with retailers adjusting prices in the lower single-digit region.
Looking ahead, the RBZ’s positive outlook dovetails with Government efforts to shore up foreign exchange reserves and foster a conducive environment for diaspora remittances. By underscoring that the transient annual inflation spike will therefore not affect consumer purchasing power and value preservation, the governor delivered a message aimed at both reassurance and renewed economic confidence.
“Going forward, the ZiG annual inflation is expected to significantly decline to below 30 percent by December 31, 2025, and to further decline towards single-digit levels in the outlook period,” Dr Mushayavanhu concluded.
As markets digest the RBZ’s projections, the broader consensus is that Zimbabwe is on course to regain a firmer foothold on price stability, an achievement that could pave the way for stronger investment inflows, renewed consumer confidence and sustained economic growth well into 2026 and beyond.
Dr Prosper Chitambara, a senior economist at the Labour and Economic Development Research Institute of Zimbabwe (LEDRIZ), says the Reserve Bank’s position is quite rational and reflects a better understanding of inflation dynamics in a transitioning currency environment.
“The surge in annual inflation is a statistical anomaly caused by the base effect, not a sign of current macroeconomic instability. What is more important is the month-on-month trend, which has remained impressively low. Stability will ultimately depend on continued monetary discipline and coordinated fiscal support,” he said.
Gladys Shumbambiri-Mutsopotsi, an economist, believes this communication from the RBZ is refreshing because it’s proactive and data-driven.
“By highlighting the difference between statistical inflation and real-time price movements, the Bank is sending a strong message to markets that panic is not warranted. I think consumers and investors should take comfort in the fact that monthly inflation is under control.
“However, we must be cautious. The path to single-digit annual inflation is not automatic; it hinges on the credibility of the Bank’s policy tools. Still, this is a promising signal of policy maturity.” – Herald
