Online Reporter
Nelson Gahadza
THE Confederation of Zimbabwe Industries (CZI) has expressed confidence that the policy target of achieving an annual ZiG inflation rate of approximately 30 percent is well within reach, citing a recent downward trend supported by a negative monthly rate and a stable local currency.
In its October 2025 update on inflation and currency developments, CZI stated that it is highly probable that ZiG’s month-on-month inflation will remain below 0.5 percent for the final two months of the year.
“As a result, annual inflation is likely to fall within the range of 15 percent to 20 percent by December 2025, which would mark a significant achievement in terms of monetary policy,” CZI said.
The central bank has set a target to reduce annual ZiG inflation to below 30 percent by the end of 2025.
The Reserve Bank of Zimbabwe (RBZ), in collaboration with the Ministry of Finance, Economic Development and Investment Promotion, has maintained stringent monetary and fiscal policies to ensure price and exchange rate stability for the ZiG currency, which was introduced in April 2024.
Authorities are focused on sustaining the current low month-on-month inflation rates and maintaining the stability of the ZiG exchange rate, which is backed by gold and foreign currency reserves.
The durability of this stability is seen as critical to the Government’s long-term plan to reintroduce a domestic mono-currency system by 2030.
According to CZI, the year-on-year inflation rate for ZiG stood at 32.7 percent in October 2025, a sharp decline from 82.7 percent in September 2025 — a drop of 50 percentage points.
CZI attributed the steep fall in inflation to the fading impact of the September 2024 devaluation, which had resulted in a significantly inflated consumer price index (CPI).
“With month-on-month inflation being well managed, it is expected that annual inflation will continue to decline. This can only be achieved if ZiG’s month-on-month inflation remains in negative territory. However, an inflation rate of 30 percent is still relatively high, necessitating further disinflation strategies into 2026,” CZI noted.
CZI reported that month-on-month inflation has been on a downward trajectory for three consecutive months, with the rate falling to -0.4 percent in October 2025 from -0.2 percent in September 2025 — the lowest recorded rate in 2025.
“Deflation indicates that goods and services are becoming cheaper in ZiG terms. This benefits consumers in the short term, as their purchasing power increases slightly. It also means that consumers who retained ZiG balances in their bank accounts can now purchase slightly more goods than they could in August 2025. If this trend continues, it could significantly boost confidence in the ZiG,” said CZI.
CZI also noted that US dollar month-on-month inflation rose slightly to 0.3 percent in October 2025 from zero percent in September 2025, indicating relative price stability in USD terms.
It added that as the de-dollarisation programme progresses, the inflation differential between ZiG and the US dollar will influence decisions on which currency to use for transactions.
“The stability of US dollar prices makes the USD attractive for both transactions and savings. ZiG must demonstrate long-term stability before it can be considered a viable alternative to the USD,” CZI observed.
CZI further highlighted that USD year-on-year inflation continued its downward trend, which began in July 2025, with the rate falling to 13 percent in October 2025 from 13.4 percent in September 2025.
