The Confederation of Zimbabwe Industries (CZI) has raised concerns about the government’s ability to achieve a 3% month-on-month inflation rate by the end of the year.
During the presentation of the 2025 National Budget, Finance Minister Mthuli Ncube projected that Zimbabwe’s annual inflation rate would remain in single digits, supported by tight fiscal and monetary policies aimed at keeping month-on-month inflation below 3%.
However, CZI’s latest inflation report casts doubt on the feasibility of this target.
“The high inflation rate recorded in January 2025 presents a significant hurdle in achieving the projected decline. The elevated ZWG month-on-month inflation rate could make it difficult to maintain low annual inflation by May 2025, when official figures will be reported,” the industry body stated.
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CZI also noted a decline in the parallel market premium in January 2025, as the ZWG depreciated more rapidly in the informal market than in the official one. Between October 1, 2024, and January 29, 2025, the ZWG fell by approximately 4.8% in the official market and 0.6% in the parallel market. Consequently, the exchange rate premium decreased from 38% to 34% over the same period.
“The tight liquidity measures, which have resulted in a scarcity of ZWG, have contributed to some exchange rate stability. However, the 34% premium remains high, making it difficult for compliant retailers to access US dollars and increasing opportunities for arbitrage,” the report added.
