Zimbabwe economy and inflation trends

An IMF staff‑monitored programme review praised Zimbabwe’s resilience, citing an 8.3% expansion in 2025 and projecting a 5% rise in 2026, with inflation remaining low at about 3.2% thanks to tight monetary policy and a stable exchange rate. The review noted that while most quantitative targets were met, the programme fell short on protected‑social‑spending and warned of downside risks from a possible major El Niño and ongoing Middle‑East tensions. Finance Minister Mthuli Ncube was slated to present a mid‑term budget review focusing on social‑sector funding, tax‑free thresholds, youth unemployment and broader structural reforms, with business groups calling for changes to the tobacco excise duty and highlighting VAT’s dominant share of tax revenue.

The following day, Zimbabwe’s actual inflation data confirmed the low‑inflation environment, showing a 3.2% annual rate in July, down from 4.7% in June, with month‑on‑month price growth nearly flat. The weighted annual rate, blending local and US‑dollar prices, also eased to 3.2%. In neighboring Zambia, inflation held at 6.5%—the lowest in eight years—thanks largely to a stronger kwacha that curbed imported price pressures. These figures underline the region’s broader price‑stability trend and give policymakers additional leeway for potential monetary adjustments.