Published: 13 hours ago

Zimbabwe's annual inflation rate measured in Zimbabwe Gold (ZiG) fell sharply to 32,7% in October, down from 82,7% in September, despite little movement in the exchange rate and persistently high consumer prices - a development analysts say reflects statistical base effects rather than genuine price stability.

According to the Zimbabwe National Statistics Agency (ZimStat), the ZiG year-on-year inflation rate - representing the average change in prices between October 2024 and October 2025 - declined by 50 percentage points, marking the steepest monthly drop since the new currency's introduction in April.

"The ZiG year-on-year inflation rate (annual percentage change) for the month of October 2025 as measured by the all-items ZiG Consumer Price Index (CPI), was 32,7%," said ZimStat. "This means that prices increased by an average of 32,7% from October 2024 to October 2025."

However, the dramatic fall in inflation came without corresponding currency or policy adjustments. The ZiG exchange rate moved only marginally - from US$1:ZiG26,6899 at the beginning of October to ZiG26,5087 as of Tuesday.

Economists say this suggests the decline may largely be due to base effects - when unusually high prices in the previous year distort current inflation comparisons - or data realignment rather than a tangible slowdown in price increases.

The new figure also diverges sharply from projections by international financial institutions. The International Monetary Fund (IMF) and World Bank had forecast Zimbabwe's annual inflation to end 2025 at around 89%, moderating to 18,2% by end-2026. ZimStat's reading, however, is more aligned with the African Development Bank (AfDB), which projects inflation of 23,6% in 2025 and 9,6% in 2026.

In contrast, the US dollar-based annual inflation rate - which tracks price changes in the economy's dominant trading currency - was recorded at 13%, showing minimal movement from 13,4% in September.

"The USD year-on-year inflation rate for October 2025 was 13%," ZimStat reported. "This means that prices increased by an average of 13% from October 2024 to October 2025."

On a month-on-month basis, the US dollar inflation rate stood at 0,3% in October, up from 0% in September. Food and non-alcoholic beverages rose by 0,2%, while non-food items increased by 0,4%.

Meanwhile, the ZiG month-on-month inflation rate was -0,4%, a slight decline from -0,2% in September - an unusual deflationary trend in an economy still facing limited liquidity and structural shortages.

"The ZiG month-on-month food and non-alcoholic beverages inflation rate was 0,7% in October, up from 0,2% in September," said ZimStat. "Non-food inflation declined to -0,9%, from -0,5% the previous month."

Despite the statistical slowdown, analysts caution that real consumer prices remain elevated, and household purchasing power continues to be strained by wage stagnation, foreign currency shortages, and high informal sector pricing indexed to the US dollar.
- NewsDay

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