Published: 2 hours ago

The Confederation of Zimbabwe Industries (CZI) has called on local businesses to review and adjust their pricing structures to reflect the country's ongoing decline in inflation, saying companies must adapt to the emerging deflationary environment rather than cling to past inflationary habits.

Zimbabwe's annual inflation, measured in the Zimbabwe Gold (ZiG) currency, dropped sharply to 32.7% in October from 82.7% in September 2025, marking a significant decline. Economic analysts project a further fall to between 15% and 20% by December 2025 if current trends persist.

In its latest report, CZI quoted former U.S. Federal Reserve Chair Ben Bernanke, noting that deflationary trends are driven by real economic shifts rather than manipulation.

"The sources of deflation are not a mystery. Deflation is in almost all cases a side effect of a collapse of aggregate demand - a drop in spending so severe that producers must cut prices on an ongoing basis in order to find buyers," the report stated.

CZI said month-on-month ZiG inflation has remained in negative territory for three consecutive months, falling to -0.4% in October from -0.2% in September 2025 - the lowest level recorded so far this year.

However, the organisation cautioned that many traders remain reluctant to reduce prices, citing fears of economic instability and potential currency fluctuations. CZI warned that this "price stickiness" - the tendency of prices to remain high despite improving macroeconomic conditions - could undermine market efficiency and delay consumer relief.

"Deflation means that goods and services are becoming cheaper in ZiG terms, which benefits consumers by enhancing their purchasing power," CZI noted. "Consumers who kept ZiG balances in their accounts are now able to buy more goods than they could a few months ago. If this momentum continues, it will significantly strengthen confidence in the ZiG."

The industry body attributed the steep fall in inflation to the fading effects of the September 2024 devaluation, which had caused a temporary spike in the Consumer Price Index (CPI). With price growth now stabilising, CZI expects inflation to ease further in the coming months.

CZI urged businesses to align their pricing behaviour with the improving macroeconomic outlook, saying doing so would help stimulate demand, boost competitiveness, and reinforce the credibility of the national currency.
- online

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