ZIMBABWE’S recent economic gains are the cumulative outcome of tight fiscal discipline, coordinated monetary policy and favourable external conditions.
These factors are now translating into tangible improvements in prices, reserves and trade performance.
From the historic fall in inflation, surge in gold earnings and a sharply narrowed trade deficit, the economy’s trajectory over the past year points to a period of hard-won stability.
January 2026 marked a defining moment for Zimbabwe’s economy as annual inflation — in the local currency — fell to single-digit level for the first time since 1997.
Official figures show year-on-year ZimGold (ZiG) inflation dropped to 4,1 percent, down from 15 percent in December 2025, while month-on-month inflation stood at 0 percent. For households and businesses, the outcome is significant.
Prices, on average, did not rise in January, a rare development in modern Zimbabwean economic history.
Weighted year-on-year inflation slowed to 1,8 percent from 13,3 percent, while United States-dollar inflation eased sharply to 1 percent from 12,4 percent.
Economist Mrs Gladys Shumbambiri-Mutsopotsi says the milestone reflects policy consistency rather than a short-term shock.
“Single-digit inflation restores predictability for ordinary citizens. It allows families to plan, businesses to price with confidence and workers to preserve purchasing power — something that has been absent for decades,” she said.
The Reserve Bank of Zimbabwe (RBZ) attributes the outcome to disciplined money supply management, exchange rate flexibility under the “willing-buyer, willing-seller” system and strengthened fiscal-monetary coordination.
RBZ Governor Dr John Mushayavanhu indicated that monetary policy in 2025 “demonstrated clear effectiveness, restored discipline and measurable macroeconomic gains, particularly in inflation control and exchange rate stability”.
On the fiscal side, Treasury maintained tight controls.
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said the Government projects a budget deficit of less than 0,5 percent of gross domestic product (GDP) in 2026, with zero reliance on central bank overdrafts — a stance maintained for six consecutive years.
As inflation cooled, external buffers strengthened, driven largely by gold’s exceptional performance.
Global gold prices rose sharply from around US$2 000 per ounce in early 2024 to above US$5 000 per ounce by mid-January 2026, supported by geopolitical tensions and safe-haven demand.
Zimbabwe, as a major gold producer, benefitted directly.
Gold exports rose from US$2,25 billion in 2024 to US$4,48 billion in 2025, accounting for roughly 47 percent of total exports.
Production increased from 36 tonnes in 2024 to 47 tonnes in 2025, a gain of approximately 31 percent.
The Reserve Bank’s gold holdings also expanded significantly.
Reserves grew from US$484,8 million in 2024 to US$1,2 billion by the end of 2025.
These reserves now cover about 1,5 months of imports.
Banker Mr Raymond Madziva says the gold rally has had effects beyond export receipts.
“When reserves rise, the currency gains credibility, which ultimately protects depositors and borrowers from volatility.”
The final leg of the stabilisation story emerged through trade.
Zimbabwe’s trade deficit narrowed sharply to US$404 million in 2025, down from a US$1,79 billion deficit in 2024.
This was driven by stronger export earnings and a significant reduction in imports due to improved domestic production.
On the import side, the most decisive shift came from food.
Following a successful 2024/2025 farming season that delivered 2,2 million tonnes of maize, maize imports fell by 48 percent year-on-year.
Industrialist Dr Nxaba Ndiweni says the trade turnaround has broader structural implications.
“Reduced imports, especially of food, signal growing domestic capacity. This supports local industry and creates jobs along the value chain.”
Taken together, falling inflation, strong gold performance and an improved trade position point to the cumulative impact of prudent economic management.
Analysts caution, however, that sustaining these gains will require continued policy consistency and the careful management of external risks.
Still, after nearly three decades of instability, recent outcomes mark a turning point. For households, businesses and investors alike, the message is clear: Disciplined work is beginning to pay off and the foundations of a more stable economy are finally taking shape.-herald
