Online Reporter
Tapiwanashe Mangwiro, Zimpapers Business Hub
ZIMBABWE’S producer price environment showed strong signs of moderating inflationary pressures in June 2025, according to the latest data released by the Zimbabwe National Statistics Agency (ZimStat).
This comes as the country has experienced a significant decline in monthly inflation since February. The month-on-month local currency inflation rate for February 2025 stood at 0,5 percent — a sharp drop from January’s 10,5 percent. This downward trend continued, with the most recent data showing a rate of 0,3 percent in June.
While annual increases remain historically high, the month-on-month figures across all three producer price indices (PPIs) — the all-items ZiG PPI, USD PPI, and weighted PPI — indicate a gradual easing of price pressures in key sectors of the economy.
“The month-on-month rate of change in June 2025 was 0,2 percent, shedding 2,2 percentage points from the May 2025 rate of 2,4 percent,” ZimStat reported.
This means that, on average, domestic producer prices rose by just 0,2 percent from May to June. Key contributors to this modest increase included the manufacture of batteries and accumulators, mining of non-ferrous metal ores, manufacture of basic iron and steel, fabricated metal products, and the mining of hard coal.
Meanwhile, several categories remained flat, including tobacco products, jewellery and bijouterie, furniture, meat processing, basic precious and non-ferrous metals, and structural metal products.
Analyst and economist Gladys Shumbambiri-Mutsopotsi welcomed the slowdown.
“After months of double-digit monthly inflation, a 0,2 percent rise represents a tangible break in the upward trajectory,” she said.
Ms Shumbambiri-Mutsopotsi noted that this moderation reflects both improved supply chain stability and the impact of macro-prudential measures implemented by the Reserve Bank of Zimbabwe and the Treasury.
Despite the softer monthly pace, year-on-year inflation remains elevated.
ZimStat’s report stated: “The year-on-year rate of change in June 2025 was 107 percent, meaning that producer prices measured by the all-items ZiG PPI rose, on average, by more than 107 percent between June 2024 and June 2025.”
Ms Shumbambiri-Mutsopotsi cautioned that while the monthly deceleration is encouraging, the legacy of past currency volatility and supply disruptions continues to exert upward pressure on annual averages.
“Addressing structural bottlenecks in energy and transport will be critical to bringing these rates down sustainably,” she said.
In terms of the US dollar-denominated index, ZimStat data shows that the month-on-month rate of change in June 2025 was 2,2 percent, down slightly from May’s 2,3 percent. In dollar terms, producers faced a 2,2 percent increase in costs from May to June, driven largely by higher prices in food-related manufacturing, including dairy, grain, and prepared animal feeds.
Several categories — including tobacco, fish preservation, vegetable oils and fats, meat and fruit processing, and hard coal mining — showed no contribution to the index’s movement.
Commenting on the US dollar PPI, economist Mark Taonezvi observed:
“Global commodity prices have remained robust, particularly for dairy and grain products. While local currency volatility has eased, dollar-linked costs still reflect international inflation dynamics.”
He suggested that “diversifying import sources and boosting domestic agricultural output could help shield Zimbabwean producers from external shocks.”
Year-on-year, the US dollar PPI rose by 16,4 percent, indicating that dollar-denominated producer costs were up by that margin compared to June 2024.
“A 16,4 percent annual rise underscores the persistence of global inflation even as domestic conditions improve,” Mr Taonezvi remarked.
The all-items weighted PPI — which balances local currency and dollar measures according to sectoral importance — recorded a month-on-month rate of change of 0,7 percent in June 2025, down from 2,2 percent in May.
“This modest rise was driven primarily by food products and metal products manufacturing, while categories such as basic metals, mining and quarrying, beverages and tobacco, paper, chemicals, textiles, wood products, and non-metallic minerals remained unchanged,” ZimStat noted.
Ms Shumbambiri-Mutsopotsi praised the performance of the weighted index.
“A 0,7 percent monthly increase is a marked improvement from earlier quarters. It suggests that inflationary pressures are broad-based but now generally subdued across most sectors.”
On an annual basis, the weighted index rose by 55,7 percent in June 2025 compared to the same month a year earlier.
“An annual rate of 55,7 percent, while still high, reflects progress toward normalisation — particularly if sustained by continued fiscal and monetary discipline,” she added.
The slowdown in month-on-month producer inflation offers a window of opportunity for policymakers to consolidate gains.
