Business Reporter
The Confederation of Zimbabwe Industries (CZI) is forecasting stable inflation for 2026, attributing this outlook to the Reserve Bank of Zimbabwe’s (RBZ) ongoing strict monetary policies.
Since the introduction of the Zimbabwean dollar (ZWG) in April 2024, the RBZ has focused on controlling inflation and stabilizing the local currency, with its Bank Policy Rate holding steady at around 35%.
In addition to the high interest rates, the RBZ has continued to utilize market operations in an effort to maintain both price and currency stability, despite challenges. While some industry players advocate for a loosening of these policies, the central bank’s stance remains firm, aiming to foster long-term economic stability.
According to CZI’s latest inflation report, the month-on-month inflation rate for November 2025 rose slightly to 0.2%, while annual inflation decreased to 19.0%. The CZI anticipates that the rate will end the year between 15% and 16%, barring significant price hikes during the holiday season or a December inflation spike above 1%.
“Even if inflation increases by 1% in January 2026, annual inflation should remain in the single-digit range by that time,” the report noted. The national budget for 2026 projects a modest inflation rate of 12.1% for the year, although CZI warned that this estimate might be too optimistic if the recent VAT increase triggers significant price distortions.
In terms of currency performance, CZI’s analysis of the ZWG’s movement between October and November 2025 shows a slight appreciation on both official and parallel markets. The premium in the parallel market dropped from 20% in October to 17% in November, marking the lowest level since the ZWG’s introduction.
“This reduction in the premium has diminished the incentive for speculative pricing, as businesses are now less likely to set prices based on unfavorable exchange rate predictions. The narrowing gap also limits opportunities for foreign currency arbitrage,” the CZI report concluded.
