Zimbabwe’s annual inflation rate fell to single digits in January for the first time since 1997, marking a significant milestone in the country’s long-running struggle with price instability and currency volatility.
Data from the Reserve Bank of Zimbabwe shows that inflation slowed sharply to 4.1 percent in January, from 15 percent in December — a drop of 10.9 percentage points in a single month. Inflation has also fallen dramatically from 85.7 percent in April last year, underscoring the scale of the recent disinflation.
The development places the Southern African — previously among the countries with the world’s highest inflation rates — back into the group of economies recording single-digit inflation, a shift authorities say is critical to stabilising the macroeconomic environment.
Officials argue that sustained price stability is central to plans to make the gold-backed Zimbabwe Gold (ZiG) currency the country’s sole legal tender by 2030.
“This marks a historic moment for Zimbabwe,” finance minister Mthuli Ncube said in an emailed statement on Monday to Bloomberg, noting that the achievement comes nearly three decades after the country last recorded single-digit inflation in its domestic currency.
He added that the government remains committed to close policy coordination to ensure that price stability is sustained.
The latest data places Zimbabwe alongside Ethiopia and Ghana, two African economies that have also recently succeeded in bringing inflation back to single digits after prolonged periods of macroeconomic stress.
Across the continent, easing inflation has become a central policy objective as governments seek to stabilise currencies, restore investor confidence and rebuild household purchasing power after years of global shocks, including the COVID-19 pandemic, supply-chain disruptions and tighter global financial conditions.
In the country’s case, the inflation slowdown is closely linked to the introduction of the ZiG in April 2024. The currency — short for Zimbabwe Gold — was launched after repeated failures of earlier monetary regimes and years of heavy reliance on the US dollar.
The ZiG represents Zimbabwe’s sixth attempt since 2009 to establish a functional local currency and reduce dollarisation. The central bank has outlined strict benchmarks that must be met before the ZiG can operate as the country’s sole currency.
These include keeping inflation in single digits and building foreign exchange reserves sufficient to cover three to six months of imports. Authorities say meeting these conditions is essential to restoring confidence in the currency and avoiding a repeat of past hyperinflation episodes.
According to Ncube, foreign assets backing the ZiG rose to $1.2 billion by December 2024, from $276 million in April when the currency was introduced.
He said the government would continue to pursue “well-coordinated monetary and fiscal policies” to entrench macroeconomic stability and strengthen the credibility of the new currency framework.