- Record High Inflation: Month-on-month inflation rate surged to 10.5% in January 2025, the third highest since the introduction of ZWG
- USD Inflation Accelerates: Year-on-year inflation in USD terms accelerated to 14.6% in January 2025, up from 2.5% in December 2024
- Food and Non-Food Inflation Rise: The inflation rate for Food and Non-Alcoholic Beverages rose to 6.8% in January 2025, while non-food inflation surged to 12.5%
Harare- Zimbabwe’s month-on-month inflation rose sharply in January 2025, both in US dollar terms and ZiG terms, according to the latest data released by the country’s statistics agency, Zimstat.
The ZiG month-on-month inflation rate reached 10.5 percent in January 2025, reflecting an increase of 6.8 percentage points compared to the December 2024 rate of 3.7 percent.
In USD terms, year-on-year inflation accelerated to 14.6 percent, up from a 2.5 percent rise recorded in December 2024.
The January 2025 ZiG inflation figure represents the third highest since the currency’s introduction, following a 37.2 percent surge in October 2024, which was driven by a devaluation event, and an 11.7 percent increase in November 2024, during a period of ongoing exchange rate instability.
The 2025 National Budget anticipates that ZiG inflation will stabilize, with a targeted month-on-month inflation rate below 3 percent.
However, analysis by Equity Axis Research, based on the same budget, indicates that the government expects the ZiG to depreciate by an average of 52 percent by the end of the year, with an average exchange rate of 36 ZiG per USD.
This suggests that 2025 is unlikely to see improvements in inflationary trends or currency stability.
Meanwhile, the ZiG month-on-month inflation rate for the Food and Non-Alcoholic Beverages category rose to 6.8 percent in January 2025, an increase of 2.2 percentage points from the December 2024 rate of 4.6 percent.
Similarly, the non-food inflation rate surged to 12.5 percent in January 2025, up by 9.3 percentage points from the December 2024 rate of 3.2 percent.
The rise in ZiG inflation has been attributed to a series of fiscal measures, including new taxes implemented by the government in January 2025, as well as external factors such as the severe regional drought experienced in the previous year.
Despite relative stability in the formal exchange rate market, the parallel market rate remained significantly high, with a premium exceeding 50 percent. This persistent disparity highlights ongoing structural challenges and speculative pressures within the foreign exchange market, further compounding inflationary pressures and macroeconomic instability.
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