The Confederation of Zimbabwe Industries (CZI) has expressed concern over the sharp rise in US dollar inflation, warning that such an increase is unusual in an economy that is already highly dollarized.
Zimbabwe has been struggling to maintain stable inflation rates, implementing various measures to control price movements. In 2024, the Reserve Bank of Zimbabwe (RBZ) introduced the ZWG currency, a local unit backed by minerals and foreign reserves, in an attempt to resolve the country’s long-standing currency issues.
However, just six months after its introduction, the ZWG lost significant value against the US dollar on the parallel market. The RBZ was forced to intervene, officially devaluing the currency by 43% to bring it closer to market realities.
Recent data from the Zimbabwe National Statistics Agency (Zimstat) shows that US dollar inflation surged from 2.5% in December 2024 to 14.6% in January 2025—an alarming 12.1% increase in just one month.
“Double-digit US dollar inflation in a highly dollarized economy is a major concern, as prices in US dollars are generally expected to remain stable,” the CZI Inflation Tracker noted.
CZI Raises Alarm Over Rising US Dollar Inflation in Zimbabwe
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Historically, US dollar inflation in Zimbabwe has remained stable since 2021, making the current spike a significant departure from past trends.
According to CZI, the increase in US dollar prices is largely driven by ZWG inflation, as retailers adjust their pricing to reflect movements in the ZWG exchange rate. This is often done to avoid penalties from the RBZ’s Financial Intelligence Unit (FIU), which closely monitors businesses suspected of using the parallel market rate.
The report also highlighted that month-on-month US dollar inflation reached 11.5% in January 2025, the highest recorded in the past four years.
