(3 Minutes Read)
The Zimbabwe National Statistics Agency (ZIMSTAT) reports that the country’s month-on-month inflation rate dropped notably to 3.7% in December, down from 11.7% in November. This decline continues a trend that began in October, when inflation reached a high of 37.2%, indicating a stabilising economy.
The recent drop is largely attributed to the devaluation of the local currency, the Zimbabwe Gold (ZiG), by 43% in September. The central bank’s strategic move to align the exchange rate with market dynamics has helped reduce price volatility, offering relief to businesses and consumers alike. In November, Finance Minister Mthuli Ncube, while presenting the 2025 national budget, expressed optimism about maintaining low inflation rates in the coming year. He projected month-on-month inflation to average below 3%, supported by strict fiscal and monetary policies designed to stabilise the economy further.
Minister Ncube outlined that the government’s fiscal strategy for 2025 aims to achieve single-digit inflation and a stable exchange rate to create a favourable business environment. Measures include tightening government spending, increasing revenue collection, and ensuring that the exchange rate remains competitive. The policy framework, he explained, is designed to reduce speculative activities that have historically undermined the currency’s value.
However, Ncube cautioned against potential risks, including a widening gap between the official and parallel market exchange rates. Such discrepancies could destabilise macroeconomic conditions and erode the progress achieved. He urged stakeholders to support government efforts to uphold market stability. Analysts have welcomed the recent inflation figures as a positive sign for Zimbabwe’s economy. The deceleration of inflation is a clear indication that the measures implemented by the Reserve Bank and Treasury are beginning to bear fruit. Maintaining this trajectory will be critical in ensuring sustainable economic growth.
Read Also:
https://trendsnafrica.com/currency-stabilization-efforts-help-zimbabwe-slows-inflation-rate-to-11-7/
The stabilisation of inflation is expected to boost investor confidence, particularly in sectors such as manufacturing, agriculture, and mining, which are key contributors to the country’s GDP. Nevertheless, long-term success hinges on consistent policy implementation and avoiding external shocks. Zimbabwe’s economic outlook appears cautiously optimistic as the government works to rebuild trust in its fiscal policies and create a robust foundation for growth.
