FULL TEXT: RBZ Governor’ Statement On Annual ZiG Inflation Outturn, Dyanmics and Outlook

Below is the full text of the Press Statement released by Reserve Bank of Zimbabwe (RBZ) governor Dr John Mushayavanhu on the annual ZiG inflation:

RECENT ANNUAL ZiG INFLATION OUTTURN, DYNAMICS AND OUTLOOK

The Reserve Bank has been closely monitoring and anticipating the recent movements in year-on-year ZiG inflation, which rose from 85.7% in April to 92.1% in May 2025, primarily owing to a once-off shock experienced in September 2024. Meanwhile, the month-on-month ZiG inflation has been relatively low and stable at less than 1% over the last three months.

The Zimbabwe National Statistics Agency (ZIMSTAT) has been reporting month-on-month ZiG inflation without annual inflation due to the absence of comparable ZiG denominated price developments on an annual basis in 2023. The transition from Zimbabwe dollar (ZW$) to ZiG prices inevitably created a statistical gap in the calculation of annual ZiG inflation figures. As a result, ZIMSTAT began computing and publishing year-on-year ZiG inflation in April 2025, after obtaining a full year of ZiG prices.

The Reserve Bank, therefore, advises the public that the recorded rise in year-on-year ZiG inflation in April and May 2025 is primarily due to the base effect emanating from the once-off spike in month-on-month inflation from 5.8% in September 2024 to 37.2% in October 2024. The current trend in annual inflation is expected to continue up to September 2025 and decline thereafter to align with the current low and stable month-on-month inflation. The current annual inflation trajectory will therefore not affect consumer purchasing power and value preservation, as the inflation impact has already been realised.

The economy is projected to return to a more stable annual inflation path from the month of October 2025. Going forward, the ZiG annual inflation is expected to significantly decline to below 30% by 31 December 2025 and to further decline towards single-digit levels in the outlook period.

Considering the current circumstances where annual ZiG inflation is not reflective of the current pricing dynamics, the Reserve Bank encourages economic agents to focus on month-on-month inflation, which has a more direct link to current ZiG purchasing power and expectations. The monthly ZiG inflation will remain low and stable as Monetary Policy remains appropriately tight to balance price stability and economic growth.

The Reserve Bank remains committed to sustaining the current low and stable monthly inflation, which is necessary to reverse the transitory trend increases in ZiG annual inflation. The prudent monetary policy management being pursued by the Reserve Bank will engender price, currency and exchange rate stability and continue to support the positive economic trajectory.

Dr. J. Mushayavanhu
GOVERNOR
4 June 2025