Business Reporter
The Confederation of Zimbabwe Industries (CZI) has called on businesses to adapt to the emerging trend of sustained inflation decline and adjust their pricing strategies accordingly.
In its latest analysis, CZI pointed to a significant drop in annual inflation, which fell from 82.7% in September 2025 to 32.7% in October 2025, as measured in the Zimbabwe Gold (ZiG) currency. Economic analysts predict that inflation could decrease further, with projections indicating a rate between 15% and 20% by December 2025.
Referencing former U.S. Federal Reserve Chairman Ben Bernanke, CZI noted that deflationary pressures are typically not artificially created but rather a reflection of broader economic realities. Bernanke famously stated, “The sources of deflation are not a mystery. Deflation is in almost all cases a side effect of a collapse of aggregate demand… a drop in spending so severe that producers must cut prices on an ongoing basis in order to find buyers.”
The deflationary trend is also reflected in the ZiG’s month-on-month inflation rate, which has shown a consistent decline for three consecutive months. October 2025 saw the lowest monthly inflation of the year, recorded at -0.4%, compared to -0.2% in September 2025. This sustained reduction signals a steady easing of inflationary pressures.
However, local businesses have historically demonstrated resistance to price reductions, often maintaining elevated prices due to concerns over past inflationary volatility. This price stickiness, or the reluctance to lower prices despite changes in broader economic conditions, could present challenges if it persists, potentially disrupting market dynamics and consumer behavior.
For consumers, deflation presents a short-term benefit, as the purchasing power of the ZiG has increased. Those holding ZiG balances are now able to purchase more goods than they could in August 2025. CZI further noted that if this deflationary trend continues, it could bolster consumer confidence in the ZiG, fostering greater economic stability.
CZI attributed the sharp decline in inflation largely to the unwinding of the effects of the September 2024 currency devaluation, which had caused a substantial surge in the Consumer Price Index (CPI). With month-on-month inflation now under control, CZI anticipates a continued downward trajectory in inflation, which would further contribute to economic stability and improved consumer sentiment.
