The Confederation of Zimbabwe Industries (CZI) has expressed doubts over the fiscal authorities' capability to attain a 3% month-on-month inflation rate by year-end.

Presenting the 2025 National Budget, Finance Minister Mthuli Ncube, projected annual inflation rate for Zimbabwe in 2025 is expected to be within single digits on the strength of stable month-on-month inflation below 3% based on tight fiscal and monetary policies; essentially indicating a significantly lower inflation rate compared to previous years.

However, the latest CZI inflation tracker doubts the possibility of attaining the set inflation target.

"The high inflation rate for January 2025 threatens to make it difficult for this to be realised. The elevated ZWG month-on-month inflation rate poses a significant challenge to achieving a low annual ZWG inflation rate by May 2025, when the annual inflation figure will be reported," the industry lobby group said.

In January 2025, CZI said there was an observed decline in the parallel market premium as ZWG depreciated faster in the parallel market compared to the official market.

The ZWG depreciated on both the official and the parallel market by about 4,8% and 0,6% respectively between the period 1st of October 2024 to 29th of January 2025.

As a result, the exchange rate premium also declined from 38% on the 1st of October to 34% on the 29th of January 2025.

"The tight liquidity stance which has seen the scarcity of ZWG has helped create some stability of the exchange rate. However, the value of 34% is still high as it creates access challenges to US$ for compliant retailers and encourages arbitrage opportunities," the inflation tracker added.