Inflation decline hinged on the pursuit of a tight monetary policy stance is not sustainable in the long term due to its adverse effects on investment and economic growth, the Confederation of Zimbabwe Industries (CZI) has warned.

Since February 2025, the month-on-month ZiG inflation rate fell to 0.5% in February, a sharp drop from the 10.5% recorded in January. The trajectory was sustained in March 2025 when the ZWG inflation declined to settle at-0,1%.

"While a fall in prices is generally desirable, deflation can also result in adverse consequences to the economy if it is sustained. It can drive down spending, investment and impede economic growth. Thus, it is advisable for the authorities to keep an eye on inflation so that sustained deflation would signal increasing liquidity into the economy," he said.

The industry lobby group said to some extent a month-on-month inflation rate of - 0.1% indicates that the monetary authorities' tight monetary policy stance is paying off.

Products that registered the lowest inflation included gas, which registered the lowest inflation rate of about -6%.

Also making it to the top five on the lowest inflation rates are electrical appliances for personal care(-4%), other services (-3%), books (-3%) and stationery (-3%).

The industry lobby group said US$ monthly declined to 0.1% in March 2025, representing a 0,1% drop from February 2025's rate of 0.2%, attributable to both US$ and ZiG month-on-month inflation rates decreased.

"The US$ year-on-year inflation for the month of March declined to 15%, which was a 0.1 percentage point drop from 15.1% in February 2025. Although there are signs of declining inflation, having double-digit annual inflation (10% and above) is still considered high and distorts economic decisions, especially since it pertains to foreign currency," CZI added.