• Zimbabwe's annual inflation for the ZiG reached 85.7%, while the USD-denominated inflation was at 14.4%
• Major contributors include costs in housing, water, and energy, linked to reliance on imported fuels
• Zambia reported 16.5%, Malawi 30.5%, Mozambique 4.77%, and Botswana maintained a low 2.8%.
• South Africa's inflation fell to 2.7%, highlighting economic resilience and contrasting sharply with Zimbabwe's crisis

Harare- Zimbabwe’s 2025 April inflation increased both in USD and ZiG terms, with ZiG annual inflation skyrocketing according to the lates data from Zimstat.

The Zimbabwe Gold (ZiG) launched in April 2024, recorded an alarming annual inflation rate of 85.7%, the first time such data was published for this currency, while the U.S. dollar (USD)-denominated annual inflation rate stood at a comparatively moderate 14.4%.

On a monthly basis, ZiG inflation rose to 0.6% in April from -0.1% in March, while USD inflation edged up to 0.2% from 0.1% over the same period.

These figures highlight a big contrast between Zimbabwe and its Southern African Development Community (SADC) neighbours, where inflation rates are generally lower, reflecting Zimbabwe's unique economic struggles driven by currency instability and structural weaknesses.

The ZiG's astronomical annual inflation rate of 85.7% is a clear indicator of its severe depreciation, exacerbated by a significant devaluation in September 2024.

The monthly uptick to 0.6% in April 2025 signals an accelerating pace of price increases, reversing the brief deflationary trend seen in March. In contrast, the USD-based inflation, while still elevated at 14.4% annually, shows a more gradual rise, with its monthly rate increasing modestly from 0.1% to 0.2%.

The primary driver behind these inflationary trends in both currencies is the Consumer Price Index (CPI) category of Housing, Water, Electricity, Gas and Other Fuels, which contributed 0.4% to ZiG’s monthly inflation and 0.1% to USD’s.

This points to rising utility costs likely tied to Zimbabwe’s heavy reliance on imported fuel, maize and energy as a central factor fuelling the country’s economic turmoil, setting it apart from regional trends.

Comparing Zimbabwe’s inflation with its SADC neighbours reveals a striking disparity. In April 2025, Zambia reported an annual inflation rate of 16.5%, unchanged from March, driven by food inflation at 18.7% and non-food inflation at 13.4%, the latter influenced by a weakening kwacha.

Malawi’s annual inflation stood at 30.5% in March 2025, a slight decline from 30.7% in February, with historical data suggesting food prices as a key driver. Mozambique saw its annual inflation rise to 4.77% in March, propelled by food and non-alcoholic beverages at 12.08%, while Botswana maintained a low rate of 2.8%, with contributions from miscellaneous goods and services at 7.7% and food at 5.8%.

South Africa’s inflation dropped sharply to 2.7% in March 2025, down from 3.2% in February, marking the lowest rate since June 2020 and falling below analysts’ expectations of 2.9%. This figure, which also dipped below the South African Reserve Bank’s 3–6% target range, was primarily driven by a steep decline in the fuel index, which fell by 8.8% compared to 3.6% in February. On a monthly basis, consumer prices rose by 0.4% in March, decelerating from a 0.9% increase in February.

Compared to Zimbabwe’s staggering 85.7% ZiG inflation and 14.4% USD inflation in April 2025, South Africa’s low and stable rate underscores its economic resilience, highlighting a stark contrast with Zimbabwe’s currency-driven crisis.

In the broader SADC context, South Africa’s 2.7% inflation rate positions it among the region’s most stable economies, closely aligned with Botswana’s 2.8% and far below Zimbabwe’s extreme rates.

Unlike Zimbabwe, where housing and utility costs dominate due to currency instability and import dependency, South Africa’s inflation is tempered by declining fuel prices, which provide significant relief to consumers and businesses. This stability enhances South Africa’s role as a regional economic anchor, supporting trade and investment within SADC.

In contrast, Zimbabwe’s reliance on imported energy and its faltering ZiG exacerbate utility-driven inflation, illustrating a structural divergence that leaves South Africa better equipped to navigate global economic pressures and contribute to regional integration goals.

Hence, a critical difference between Zimbabwe and its SADC counterparts lies in the drivers of inflation. In Zimbabwe, housing and utilities dominate, reflecting deep-seated issues such as currency volatility and an overreliance on imported energy, which amplify utility costs.

Conversely, food prices are the predominant inflationary force in most SADC countries. Zambia’s food inflation of 18.7% and Mozambique’s 12.08% for food and beverages highlight agricultural vulnerabilities, while Botswana’s more balanced drivers include food at 5.8%. Malawi has long been affected by food price volatility due to its dependence on subsistence farming.

This divergence illustrates Zimbabwe’s unique economic predicament: while its neighbours grapple with supply-side pressures in agriculture, Zimbabwe’s inflation is fuelled by structural deficiencies and a faltering currency, making stabilisation efforts particularly complex.

The ramifications of Zimbabwe’s high inflation are far-reaching, both domestically and regionally. At home, the escalating cost of living especially in housing and utilities erodes purchasing power, deepening poverty and reinforcing reliance on the USD as a stabilizing force, which in turn undermines confidence in the ZiG.

Within the SADC region, Zimbabwe’s woes could impede collective goals of economic integration and trade, as soaring production costs diminish its competitiveness and heavy import reliance strains foreign exchange reserves.

Meanwhile, countries like Botswana and Mozambique, with their lower and more stable inflation rates, are better positioned to attract investment and drive growth, widening the economic gap with Zimbabwe.