HARARE – Zimbabwe has recorded single-digit inflation in its domestic currency, the ZiG, with annual inflation falling to 4.1 percent in January 2026, a development government has hailed as a major milestone in restoring macroeconomic stability.
The finance ministry said the achievement marks the country’s first sustained period of single-digit inflation in nearly three decades, attributing the outcome to coordinated fiscal discipline and tight monetary policy by treasury and the Reserve Bank of Zimbabwe (RBZ).
Annual inflation was last in single digits in 1997.
Finance minister Mthuli Ncube said price stability was critical to protecting household incomes and encouraging investment, adding that the ZiG currency is now fully backed by gold and foreign currency reserves.
In a statement on Monday the ministry said reserve backing for the ZiG has risen from about US$276 million in April 2024 to US$1.2 billion by December 2025, helping stabilise the exchange rate and contain inflationary pressures.
Government data shows prices of basic consumer goods such as bread, mealie-meal, sugar, cooking oil and flour have remained largely stable over the past 12 months, with only modest movements recorded across most categories.
Authorities argue that the relative stability of household prices reflects reduced speculative pricing and improved confidence in the local currency.
However, economists have urged caution, warning that while the headline inflation figure is encouraging, underlying vulnerabilities remain.
Economist Tinashe Murapata said the inflation outcome was positive but warned that Treasury’s statement glossed over the fragility of the currency and the broader monetary system.
“Without doubt, 4.1 percent inflation in ZiG is positive and encouraging. But Treasury’s report lacks the necessary nuance about how fragile the currency and the broader monetary system remain,” Murapata said.
“There are significant economic headwinds that authorities must confront directly. Inflation expectations are still elevated, and Treasury and the RBZ need to ask why. Expectations feed into realised inflation in the months that follow.”
Murapata also cautioned against complacency, drawing parallels with Zimbabwe’s past experience.
“Zimbabwe experienced deflation in 2015–2016, meaning negative inflation, just before the currency regime collapsed. That is the cautionary tale. ZiG is not yet fully fungible or market-determined. It is fixed, and with that rigidity comes fragility which, if mismanaged, can quickly turn destructive,” he said.
The ZiG is the country’s sixth currency experiment since 2009.
Professor Gift Mugano, an economist aligned with the government, said the RBZ was fulfilling its core mandate of maintaining price stability.
“The Reserve Bank of Zimbabwe’s mandate is to foster price stability. They are winning,” Mugano said.
However, he stressed that sustained success would depend on strict fiscal discipline.
“As we continue to work towards durable stability, fiscal discipline must be non-negotiable and legally entrenched, with a zero-tolerance stance on quasi-fiscal operations, abuse of Public Finance Management Systems, and a commitment to transparent, cash-based budgeting,” Mugano added.
Finance minister Mthuli Ncube pledged to entrench price stability through continued implementation of prudent fiscal and monetary policies, while calling on businesses to exercise restraint in price-setting and workers to moderate wage demands.
Zimbabwe is also aligning its policies with SADC macroeconomic convergence targets, including inflation within a 3–7 percent range, sustainable budget deficits and controlled current account balances.
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