• Annual inflation in ZiG terms surged to 95.8% in July 2025, up from 92.5% in June and 92.1% in May
• In USD terms, annual inflation increased to 14.4% in July from 14% in June and 13.9% in May,
• The rise in inflation is driven by domestic policy changes, currency instability, and heavy reliance on imports for essential 

Harare- Zimbabwe’s inflation in July surged in both ZiG terms and US dollar terms driven by a unique blend of domestic policy shifts and external pressures.

According to the latest trade data from Zimstat, annual inflation in ZiG terms surged to 95.8% in July 2025, up from 92.5% in June and 92.1% in May, with monthly inflation rising to 1.6% from 0.3% in June.

In USD terms, annual inflation increased to 14.4% in July from 14% in June and 13.9% in May, with monthly inflation shifting to 0.3% from -0.2% in June.

These figures reflect a persistent upward trend, setting Zimbabwe apart from its regional peers.

The dramatic rise in ZiG monthly inflation is primarily attributed to domestic policy changes and currency instability. A significant factor is the repeal of Statutory Instrument 81A, which previously regulated pricing.

Introduced in April 2024 by the Reserve Bank of Zimbabwe (RBZ) and backed by USD and mineral reserves, the ZiG was intended to stabilize the economy.

 However, its market-determined exchange rate starting at ZIG13.55/$1 has failed to inspire confidence, resulting in 43% devaluation in September 2024, bringing out the primary factor driving annual inflation.

 Zimstat identifies rentals, utilities (such as power), and fuel as the major drivers of this inflation, reflecting the impact of market liberalisation on essential costs.

The RBZ anticipates that ZiG inflation will peak in September 2025 due to a base effect from a one-off spike in September 2024, projecting a decline to below 30% by December 2025.

In USD terms, inflation rose to 14.4% in July 2025, driven by imported inflation amid global uncertainties.

Zimbabwe’s continued heavy reliance on imports (fuel which his priced in USD only) has exposed it to rising global prices, pushing up costs in USD.

Rentals, utilities, and fuel also contribute significantly, as these sectors are influenced by both local demand and imported inputs priced in foreign currency.

The shift from negative monthly inflation (-0.2% in June) to positive (0.3% in July) indicates a reversal of deflationary pressures, likely due to increased import costs.

Unlike ZiG inflation, which is heavily tied to currency depreciation, USD inflation reflects Zimbabwe’s vulnerability to external price shocks, compounded by its dual-currency system where the USD remains a preferred medium despite the ZiG’s introduction.

Zimbabwe’s inflation is exacerbated by deeper structural issues, including low productivity, high public debt (estimated at 87% of GDP in 2023), and a history of hyperinflation that has eroded trust in local currencies.

These factors limit the RBZ’s ability to control inflation effectively, distinguishing Zimbabwe’s situation from more stable regional economies.

 Comparison with Top Five SADC Economies

South Africa’s annual inflation rose to 3% in June 2025 (latest data from peers, still below June for Zim) , a modest increase from 2.8% in prior months, driven by higher prices for food and non-alcoholic beverages. This stability contrasts sharply with Zimbabwe’s 95.8% ZiG and 14.4% USD inflation, reflecting South Africa’s stronger currency (the rand) and effective monetary policies under the South African Reserve Bank.

Botswana’s inflation increased to 2% in June 2025 from 1.9% in May, with price rises in miscellaneous goods and services and food. Botswana’s inflation is a fraction of Zimbabwe’s, supported by a stable pula and a diversified economy less reliant on imports for essentials, unlike Zimbabwe’s import-driven pressures.

Angola’s inflation fell to 19.73% in June 2025, the lowest since November 2023, aided by kwanza stabilisation and improved goods availability. Though higher than most SADC peers, it remains well below Zimbabwe’s ZiG rate and closer to its USD rate (14.4%).

Tanzania’s inflation edged up to 3.3% in June 2025, driven by food and non-alcoholic beverages. This moderate level, supported by a stable shilling and robust agricultural output, contrasts with Zimbabwe’s reliance on imports and currency depreciation, keeping Tanzania’s inflation far lower.

Namibia’s inflation rose to 3.7% in June 2025, with increases in alcoholic beverages and tobacco. Pegged to the South African rand, the Namibian dollar provides stability, keeping inflation low compared to Zimbabwe’s volatile ZiG and USD rates, further aided by less exposure to global import shocks.

Comparison with Other African Economies

Zambia’s inflation eased to 14.1% in June 2025, the lowest since April 2024, driven by a 20% kwacha appreciation against the USD since March, fueled by surging copper prices and agricultural recovery. This is comparable to Zimbabwe’s USD inflation (14.4%) but far below its ZiG rate (95.8%). Zambia’s currency strength tempers import costs, a relief Zimbabwe lacks due to ZiG depreciation.

Nigeria’s inflation fell to 22.22% in June 2025, the softest since April 2023, though food inflation rose to 21.97% due to the Sallah festival. While higher than Zimbabwe’s USD rate, it is significantly lower than its ZiG rate.

Kenya’s inflation held steady at 3.8% in June 2025, within the central bank’s 2.5%–7.5% target, with slowing price growth in food and transport. This stability, supported by a robust shilling and domestic production, stands in contrast to Zimbabwe’s import reliance

Closer to home, Mozambique’s inflation rose to 4.15% in June 2025, driven by food. Though rising, it remains moderate compared to Zimbabwe, reflecting better exchange rate management and less severe structural issues.

Zimbabwe’s inflation surge is uniquely severe due to  ZiG’s depreciation following market-driven pricing contrasts with stable or appreciating currencies in Zambia, South Africa, and Kenya, the repeal of Statutory Instrument 81A unlike the controlled monetary frameworks in Botswana and Tanzania, import reliance and structural weaknesses like high debt and low productivity

In contrast, SADC and other African economies benefit from stronger currencies, effective policies, and robust domestic output, keeping inflation rates significantly lower.

While the RBZ anticipates a decline by December 2025, Zimbabwe’s path to stability remains uncertain without addressing these root causes.

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