Zimbabwe tames inflation, now the test is keeping it below 10%

Zimbabwe’s annual inflation rate has fallen below 10% for the first time since 1997, a milestone for a nation once synonymous with hyperinflation and trillion-dollar banknotes. The question now is whether the stability can last.

The International Monetary Fund appears cautiously optimistic. The lender earlier this month approved a 10-month staff-monitored program for the southern African nation after years of engagement, and said inflation in 2026 is “expected to remain in single digits, reflecting tight monetary conditions and a more stable foreign-exchange market.”

Inflation in local-currency terms eased to 4.1% last month from 15% in December. Authorities credit the slowdown to tighter monetary policy, restrained fiscal spending and efforts to back the new ZiG currency with gold and foreign reserves. The central bank has sought to curb the liquidity surges that in the past fuelled rapid currency depreciation and price spikes.

Improved terms of trade are providing additional support, with lower oil prices cutting import costs while surging gold and platinum prices bolster export earnings and reserves.

Durable price stability would ease investor concerns about Zimbabwe’s risk profile and help unlock investment in its vast mineral resources, including lithium and platinum, both critical to global energy- transition supply chains.

Skepticism remains. Zimbabwe has declared victory on inflation before, only for gains to unravel amid policy reversals, political pressures or renewed currency instability.

For many, the trauma of the hyperinflation years less than two decades ago still looms, when pensions were wiped out, salaries rendered meaningless and prices doubled in hours, forcing citizens to barter for basic goods. At its peak, Zimbabweans needed trillions of dollars to buy a loaf of bread.

Mercy Ndoro remembers the chaos. As finance director of Dairibord Holdings, the nation’s largest milk processor, she and her team repriced products constantly just to survive.

“We were using replacement pricing,” said Ndoro, now the company’s chief executive officer. “It was very difficult to forecast what the cost will be in the next month, week, or day. We ended up losing money. There was a lot of value erosion. How did we cope? We did not cope.”

When hyperinflation peaked in 2008, it rendered the Zimbabwe dollar worthless. Since then, authorities have repeatedly tried to re-establish a local currency in place of the US dollar. The latest iteration is the ZiG — short for Zimbabwe Gold.

Ndoro acknowledges the operating environment is “obviously much better” today. But the Zimbabwe National Chamber of Commerce cautions that stabilisation is only the beginning.

The inflation “numbers show what is possible. Whether they become permanent depends on what follows,” the lobby group said. “History will judge this moment not by inflation rate itself, but by whether policymakers protect it long enough for confidence to take root. That is the real test.”

© 2026 Bloomberg

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