Online Reporter
Tapiwanashe Mangwiro
Senior Business Reporter
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 Zimbabwe has experienced a significant drop in monthly inflation since February. The month-on-month local currency inflation rate for February 2025 was 0,5 percent, a sharp decrease from January’s 10,5 percent.
This 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), all items ZiG PPI, USD PPI and weighted PPI, point to 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 on the May 2025 rate of 2,4 percent,” ZimStat said.
This indicates that, on average, domestic producer prices increased by just 0,2 percent from May to June.
Key contributors to this uptick included the manufacture of batteries and accumulators, mining of non-ferrous metal ores, manufacture of basic iron and steel, manufacture of fabricated metal products and 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 taken 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 107,0 percent, meaning that producer prices measured by the all items ZiG PPI rose, on average, 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 supply disruptions continues to exert upward pressure on annual averages.
She added: “Addressing structural bottlenecks in energy and transport will be critical to bringing these rates down sustainably.”
In terms of the US dollar-denominated index, ZimStat data reveals that the month-on-month rate of change in June 2025 was 2,2 percent, shedding 0,1 percentage points on the May 2025 rate of 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 the local currency has stabilised, dollar-linked costs still reflect international inflation dynamics.”
He suggested, “Diversifying import sources and boosting domestic agricultural output could help shield Zimbabwean producers from external shocks.”
Year on year, the US dollar PPI climbed 16,4 percent, indicating that dollar 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,” he 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 in June 2025 of 0,7 percent, shedding 1.5 percentage points on the May 2025 rate of 2.2 percent.
“This modest rise was driven primarily by food 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 said.
Ms Shumbambiri-Mutsopotsi praised the weighted index’s performance saying, “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 55,7 percent in June 2025 compared with 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.
“The Reserve Bank’s recent tightening of liquidity and foreign exchange controls appears to be bearing fruit,” noted Ms Shumbambiri-Mutsopotsi. “However, ensuring consistent power supply and logistics efficiency will be essential to maintain downward momentum.”
Looking ahead, businesses and investors will closely track the July and August PPI readings. Should monthly rates remain in low single digits, it would signal a decoupling of domestic inflation from earlier cyclical peaks.
“Sustained moderation could pave the way for more stable input costs, boosting manufacturing competitiveness and, ultimately, consumer welfare,” said Mr Taonezvi.
For now, June’s data mark a tentative but welcome shift away from the sharp spikes that characterised much of 2024 and early 2025.
As Zimbabwe navigates the path towards price stability, continued vigilance and targeted reforms will be key to ensuring that producer-level gains translate into broader economic benefits.
