Zimbabwe's annual inflation dropped sharply to 32,7 percent in October 2025, down from 82,7 percent in September, marking one of the steepest slowdowns in recent years as the effects of the 2024 currency devaluation fade and the ZiG continues to stabilise.
According to the Zimbabwe National Statistics Agency (ZimStat), prices rose by an average of 32,7 percent between October 2024 and October 2025 - a major improvement from the three-digit inflation levels that dominated earlier this year.
The latest figures extend a six-month disinflation streak, underscoring the impact of a firmer exchange rate and tighter monetary policy by the Reserve Bank of Zimbabwe (RBZ).
The development comes just over a year after the RBZ's 46 percent currency devaluation in September 2024, which initially triggered a surge in inflation as prices adjusted to a weaker exchange rate. Inflation remained elevated for much of early 2025, averaging above 90 percent between May and August, but has since fallen steadily amid improved market confidence in the ZiG.
ZimStat data shows inflation easing from a peak of 95,8 percent in July, to 93,8 percent in August, 82,7 percent in September, and now 32,7 percent in October.
Economist Dr Prosper Chitambara said the October figure signals that the currency realignment shock has largely passed.
"We are seeing the effects of exchange rate ‘pass-through' wearing off. This reflects tight liquidity management and reduced speculative demand," he said.
"The ZiG is finally holding its ground, and monetary policy is biting where it should."
RBZ Governor Dr John Mushayavanhu has maintained that inflation will close the year below 30 percent before easing to about 20 percent in 2026.
"The transition to ZiG pricing was naturally associated with temporary distortions, but with fiscal restraint and continued exchange rate stability, inflation will continue to ease," he said at a recent post-MPC briefing.
Economist Mrs Tinashe Muringi welcomed the figures but warned that sustained progress hinges on fiscal prudence.
"The main risk to continued disinflation lies in fiscal policy. As long as Government keeps spending under control and avoids monetising deficits, inflation should comfortably remain below 30 percent by December," she said.
ZimStat also reported month-on-month deflation, with prices falling by 0,4 percent in October after a 0,2 percent decline in September. The data indicates mild deflation in non-food items, suggesting stabilising domestic prices.
Food and non-alcoholic beverages inflation, however, rose slightly to 0,7 percent, up from 0,2 percent in September, while non-food inflation deepened to -0,9 percent from -0,5 percent.
Dr Chitambara said the contrast between food and non-food prices reflects seasonal and structural dynamics.
"Food prices are being influenced by supply conditions and import costs, while non-food inflation reflects the currency's stability and weaker consumer demand," he explained.
Analysts say the RBZ's tight liquidity controls, limited quasi-fiscal activities, and closer monitoring of the interbank market have been key in achieving the latest results. Fiscal restraint and improved agricultural output have also eased pressure on prices.
Mrs Muringi noted that business confidence is gradually improving as firms adjust to ZiG-based pricing.
"We're seeing a shift toward ZiG benchmarking. Once confidence builds, production and employment could further stabilise prices," she said.
Despite the positive trajectory, global commodity prices - especially for fuel and grain - remain a threat, given Zimbabwe's dependence on imports. However, the country's enhanced forex retention framework could cushion it from external shocks.
Dr Chitambara emphasised that exchange rate stability will remain pivotal.
"The currency is the backbone of price stability. As long as the RBZ maintains transparency and avoids excessive money creation, inflation will continue to moderate," he said.
The October data represents a major milestone in Zimbabwe's quest for price stability. After months of turbulence following the 2024 devaluation, the sharp fall in inflation signals that monetary and fiscal reforms are beginning to pay off.
If current trends persist, economists say Zimbabwe could end 2025 with one of its lowest inflation readings in more than five years, setting a foundation for a more predictable and sustainable economic environment in 2026.
- The Herald
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