Story by Stanley James, Business Reporter
ZIMBABWE has laid the foundation for price stability after the ZiG yearly inflation dropped four percentage points in December this year to 15 percent, driven by the tight money supply system.
Data released by the Zimbabwe National Statistics Agency (ZIMSTAT) shows that the local currency inflation rate ended the year on a double-digit trend, having risen from an over 100 % level in January, reflecting the lowest inflation rate since the launch of the ZiG in April last year.
The drop in inflation has also been strengthened by reserves backing the domestic currency that are now hovering at over US$1 billion.
Economic stability has been described as important in boosting savings and restoring business confidence.
“Transactions in the domestic currency are on the rise on the electronic systems all because of stable conditions, when the currency is not eroded by persistent increase in prices this helps to plan and strengthen the currency, a trend we are seeing here in Zimbabwe, this is very crucial because it enables government industry and commerce to further enhance productivity in the economy,” ZimSwitch Chief Finance Officer Mr Tapiwa Chirombo said.
Businesses have also commended the Central Bank and treasury for instituting measures to reduce inflation.
“Authorities are walking the talk on what they intend to do and this is what is now leading to reduction within the inflation level, as retailers we want to work with stakeholders in maintaining this momentum as it leads to growth, predictability and benefits the nation, it is our duty to safeguard such gains if we want to progress riding on the current gains,” Confederation of Zimbabwe Retailers president, Dr Denford Mutashu said.
Treasury is expecting yearly domestic currency inflation to fall to single digits by the first quarter of 2026, an element that has never been seen in the economy since 1997.
