Zimbabwe Tames Inflation, Now the Test Is Keeping It Below 10%

Article content(Bloomberg) — 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.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe 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.”Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentInflation 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 fueled rapid currency depreciation and price spikes. Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentImproved 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. Article contentDurable 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. Article contentSkepticism remains. Zimbabwe has declared victory on inflation before, only for gains to unravel amid policy reversals, political pressures or renewed currency instability. Article contentFor 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. Article contentArticle contentMercy Ndoro remembers the chaos. As finance director of Dairibord Holdings Ltd., the nation’s largest milk processor, she and her team repriced products constantly just to survive.Article content“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.”Article contentWhen 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.Article contentNdoro acknowledges the operating environment is “obviously much better” today. But the Zimbabwe National Chamber of Commerce cautions that stabilization is only the beginning. Article contentThe 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.” Article contentSign up here for the twice-weekly Next Africa newsletter, and subscribe to the Next Africa podcast on Apple, Spotify or anywhere you listen.Article content—With assistance from Desmond Kumbuka.Article contentTrending Subscriber only. 'We need to wake up': Atlantic Canada a microcosm of the problems facing the rest of the country Subscriber only Economy Canadians Say They'll Buy Cheaper Chinese EVs as Tariffs Drop PMN Business Subscriber only. 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