Inflation falls to 3.8%

LIVINGSTONE MARUFU

Zimbabwe Gold (ZiG) annual inflation continued its downward trajectory in February, easing to 3.8% from 4.1% in January, as authorities maintained a prudent monetary policy stance that has kept money supply growth firmly under control.

The latest figures mark the lowest local currency inflation rate in nearly 30 years, underscoring sustained price stability amid tight liquidity conditions and elevated interest rates.

Firm policy discipline has also helped anchor the exchange rate, with the parallel market premium remaining below 20%, reflecting continued restraint in local currency supply.

The Zimbabwe National Statistics Agency (ZimStat) said both ZiG and United States dollar-denominated goods prices are trending downwards.

“The ZiG year-on-year inflation rate (annual percentage change) for the month of February 2026, as measured by the all-items ZiG Consumer Price Index (CPI), was 3.8%, shedding 0.3 percentage points on the January 2026 rate of 4.1%,” ZimStat said.

This means prices increased by an average rate of 3.8% between February 2025 and February 2026.

Month-on-month price gains remained subdued across the ZiG, US dollar and weighted indices.

“The ZiG month-on-month inflation rate was 0.1% in February 2026, gaining 0.1 percentage points on the January 2026 rate of 0.0%,” ZimStat stated.

In practical terms, prices, as measured by the all-items ZiG Consumer Price Index, rose by an average of just 0.1% between January and February 2026.

The marginal uptick reflects continued stability in the local currency, despite slight movements in selected non-food categories.

Food inflation in ZiG terms softened during the month under review.

ZimStat noted: “The ZiG month-on-month Food and Non-Alcoholic Beverages inflation rate was -0.1% in February 2026, shedding 0.2 percentage points on the January 2026 rate of 0.1%.”

The moderation is significant, given that food prices have historically been a major driver of inflation volatility.

The latest decline follows a dramatic turnaround over the past year. ZiG annual inflation had peaked at 95.8% in July last year, reflecting initial volatility following the currency’s introduction.

Zimbabwe has since achieved a sharp reduction in inflation, with annual rates falling into single digits in January for the first time in nearly three decades — a milestone that signals a break from the country’s painful hyperinflationary past.

The disinflation has been driven by a combination of tight monetary policy, fiscal restraint and improving confidence in the ZiG, supported by disciplined liquidity management.

Economist Malone Gwadu said the Reserve Bank of Zimbabwe (RBZ) has made notable progress in implementing its disinflation programme.

“We are now in the single-digit era of inflation as well as exchange rate stability between the local currency and other currencies in the multi-currency basket,” Gwadu said.

“It’s a show of competency and a reflection of the results achieved through disciplined monetary policy positions for almost two years. It’s a step in the right direction, but we now need to move from the disinflationary period to sustained development.We now need a monetary policy that is more accommodative of the industry,” he said.”