RBZ Governor Expects ZiG Inflation To Remain High Until September After Soaring To 92.1% – Here’s Why
The Reserve Bank of Zimbabwe (RBZ) has moved to calm fears after annual inflation for the country’s gold-backed ZiG currency surged to a staggering 92.1% in May 2025. Governor Dr. John Mushayavanhu insists this alarming figure is a temporary distortion caused by last year’s economic shocks and the currency’s recent introduction – predicting a dramatic drop before year-end.
The Inflation Puzzle: Why 92.1% Doesn’t Tell The Full Story
The RBZ’s latest statement reveals a complex statistical anomaly behind the headline inflation number. Since the ZiG only launched in April 2024, economists lacked historical data to calculate annual inflation until now.
“We’ve been measuring month-on-month inflation, but annual comparisons weren’t possible until we had a full year of ZiG pricing data,” explained Dr. Mushayavanhu. “This created what statisticians call a ‘base effect’ distortion.”
The situation was worsened by a sudden price spike in September 2024, when month-on-month inflation rocketed from 5.8% to 37.2% following fuel and electricity tariff adjustments.
“That one-off shock is still influencing annual calculations today,” the Governor noted. “But critically, monthly inflation has stayed below 1% since February – that’s the real story.”
The Road Ahead: When Will Inflation Actually Fall?
The central bank projects the current inflation spike will persist through September before beginning a sharp decline:
October 2025: Transition to stable inflation begins
December 2025: Annual rate expected below 30%
2026 Outlook: Single-digit inflation targeted
“By year-end, we’ll see inflation numbers that properly reflect current economic conditions,” Mushayavanhu assured. “The September spike will drop out of annual calculations.”
The RBZ emphasizes that its tight monetary policy – maintaining high interest rates and controlling money supply – has successfully stabilized month-on-month price increases. Gold reserves backing the ZiG have nearly tripled from $257 million (R4.7 billion) to $700 million (R12.8 billion) since launch.
Should Zimbabweans Be Worried? The RBZ Says No
Despite the eye-watering 92.1% figure, the bank insists this doesn’t reflect current economic reality:
Purchasing Power: Most price increases already occurred in late 2024
Wages & Prices: Now increasing at under 1% monthly
Currency Stability: ZiG has maintained steady exchange rates
“This isn’t new inflation – it’s just math catching up with old data,” said one RBZ official. “Your ZiG today buys basically the same as it did in January.”
Economists remain cautious but acknowledge the technical explanation. “If monthly inflation stays low, the annual rate must eventually follow,” noted Harare-based analyst Tinashe Mupaso. “The question is whether external shocks might disrupt this trajectory.”
With the RBZ pledging continued tight monetary control, all eyes will be on September’s inflation data – when Zimbabwe should start seeing the “real” inflation picture emerge.
