Monthly inflation takes slight dip

Zimbabwe’s weighted and US dollar monthly inflation rate took a downturn in May 2025 after dropping by 0,3 percentage points to 0 percent, reflecting progress towards durable economic stability across both local and foreign prices.

According to the latest data from the Zimbabwe National Statistics Agency (ZimStat), the US dollar (USD) month-on-month inflation rate fell to -0,3 percent in May, shedding 0,5 percentage points on the April rate of 0,2 percent.

However, the Zimbabwe Gold (ZiG) month-on-month inflation rate was 0,9 percent in May, gaining 0,3 percentage points on the April rate of 0,6 percent.

Consequently, the developments resulted in a decline in the weighted inflation rate, reinforcing hopes of a more predictable economic environment going forward.

Presenting the prices statistics on Tuesday, ZimStat Acting Director- Macroeconomics, Mr Munyaradzi Chikadaya, however, said:

“The USD Consumer Price Index (CPI) was 121,76 in May 2025 and 122,12 in April 2025. In May 2024, the index was 106,85.

“The ZiG Consumer Price Index was 187,42 in May 2025, 185,68 in April 2025, and 97,58 in May 2024.”

The food and non-alcoholic beverages category saw a US dollar month-on-month inflation rate of -0,9 percent in May, shedding 0,9 percentage points on the April rate of 0,0 percent.

While the May USD month-on-month non-food inflation rate was 0 percent, shedding 0,3 percentage points on the April rate of 0,3 percent. However, in ZiG, the month-on-month food and non-alcoholic beverages category inflation rate was 1,6 percent in May, gaining 1,8 percentage points on the April rate of -0,2 percent.

While the May ZiG month-on-month non-food inflation rate was 0,6 percent, shedding 0,5 percentage points on the April rate of 1,1 percent.

Resultantly, Mr Chikadaya said: “In USD, the mean month-on-month inflation rate for the period January to May was 2,4 percent, while in ZiG for the same period was 2,5 percent.”

This is a reflection of the overall easing of price pressures across key consumer goods categories.

Zimbabwe’s economy operates in a dual-currency system, making US dollar price movements an essential indicator of broader economic conditions.

In the long run, the monthly inflation determines the inflation trajectory, meaning the monthly drop in February should eventually lead to a lower annual rate.

With monthly inflation cooling off in both the ZiG and US dollar terms, the weighted inflation rate, which captures price dynamics in the two currencies, also recorded a significant decline.

However, the US dollar year-on-year inflation rate (annual percentage change) for May as measured by the all-items US dollar Consumer Price Index, was 13,9 percent. This means that prices as measured by the US dollar all-items CPI increased by an average of 13,9 percent between May 2024 and May 2025.

According to ZimStat, the ZiG year-on-year inflation rate (annual percentage change) for May as measured by the all-items ZimStat’s ZiG Consumer Price Index, was 92,1 percent. This means that prices as measured by the ZiG all-items CPI increased by an average of 92,1 percent between May 2024 and May 2025.

While the annual inflation rate remains elevated, the sharp month-on-month decline in the US dollar signals a positive trajectory for price stability.

In the long run, the monthly inflation determines the inflation trajectory, meaning the monthly drop in May should eventually lead to a lower annual rate.-herald