Zimbabwe Makes History with Single-Digit Inflation After 20 Years: USD Plunges To 1%, ZiG Stable at 4.1%

Zimbabwe Hits Single-Digit Inflation For First Time In 20 Years: USD Inflation Plunges To 1%, ZiG Falls To 4.1%

Zimbabwe has made economic history. For the first time in over two decades, the nation’s inflation rate has fallen into single digits. Official data for January 2026 reveals a dramatic collapse in the US dollar inflation rate to just 1%, while the new local currency, the ZiG, has stabilised at an annual inflation rate of 4.1%.

The milestone, announced by the Ministry of Finance, Economic Development and Investment Promotion on 26 January 2026, marks the end of a 20-year wait for price stability. In a sweeping statement, Finance Minister Mthuli Ncube declared the achievement a foundational victory for the nation’s economic future.

“This marks a critical milestone towards durable macroeconomic stability, critical for sustainable economic growth and the achievement of Vision 2030, Towards a Prosperous and Empowered Upper Middle-Income Society.”

A Historic Milestone Built on Gold Reserves

Minister Ncube directly linked this success to the introduction of the structured ZiG currency in April 2024. He emphasised that the currency’s backing by tangible reserves has been crucial to building public and market confidence, calling the result of a concerted policy effort.

“This marks a historic milestone for Zimbabwe after nearly three decades since the country recorded single-digit inflation in domestic currency. This is a result of concerted and consistent efforts by the Ministry of Finance, Economic Development and Investment Promotion and the Reserve Bank of Zimbabwe through the implementation of complimentary fiscal and monetary policies.”

The statement provided a clear definition of the newly achieved stability and its intended permanence.

“Price stability implies low and stable inflation, typically single digit inflation. The objective of the Government is to maintain single digit inflation for the year and beyond as part of the macro-economic stabilising framework.”

The reserves backing the ZiG have seen substantial growth. The Ministry reported that foreign asset reserves increased from US$276 million (approx. R5.2 billion) at the currency’s launch to US$1.2 billion (approx. R22.8 billion) by the end of December 2025.

Price Stability Reaches the Kitchen Table

The government’s report presented data suggesting the inflationary slowdown is being felt by consumers. A comparison of prices from January 2025 to December 2025 showed little movement or even decreases in the cost of essentials like bread, mealie meal, sugar, and cooking oil.

The Ministry outlined the profound impact of this new stability, shifting the national conversation from survival to planning.

“For citizens, stable prices preserve buying power of incomes and protects savings. For business, it enables long term planning, reduces operational costs and enhances profitability. This also eliminates opportunities for arbitrage and speculation which distorts the macro-economic environment.”

The Call to Cement the Victory

Looking forward, the statement contained a direct appeal to businesses and labour unions. The government urged all sectors of society to help lock in the gains and prevent a return to the volatile cycles of the past.

“To further guarantee the stability going forward, there is also need for all stakeholders, particularly business and labour to work closely with Government to entrench stability. Specifically, business should exercise restraint in price setting, while workers should align their salary adjustments requests to inflation developments.”

Minister Ncube concluded that this achievement aligns Zimbabwe with key regional SADC macroeconomic benchmarks, which target an inflation range of 3-7%. The explicit goal is now to defend this single-digit territory for the foreseeable future.