Zimbabwe: Czi Tips Businesses to Align Prices With Deflationary Trends

The Confederation of Zimbabwe Industries (CZI) has urged businesses to adapt to the emerging reality of sustained inflation decline and adjust their prices in line with the current deflationary trends.

Zimbabwe's annual inflation, measured in the Zimbabwe Gold (ZiG) currency, fell sharply to 32.7% in October from 82.7% in September 2025, with analysts projecting a further drop to between 15% and 20% by December 2025.

Quoting Ben Bernanke, former Chair of the U.S. Federal Reserve, CZI noted that deflationary patterns are not artificially induced but stem from underlying economic realities.

"The sources of deflation are not a mystery. Deflation is in almost all cases a side effect of a collapse of aggregate demand... a drop in spending so severe that producers must cut prices on an ongoing basis in order to find buyers," the industry lobby group said in its report.

CZI highlighted that ZiG month-on-month inflation has been on a downward trajectory for three consecutive months, dropping to -0.4% in October 2025 from -0.2% in September 2025, the lowest inflation rate recorded so far this year.

However, the organisation cautioned that local traders may remain hesitant to reduce prices due to historical fears of economic volatility. It warned that price stickiness, the resistance of market prices to decrease despite changes in the broader economy, could negatively impact market efficiency if left unchecked.

Deflation, the CZI explained, means that goods and services are becoming cheaper in ZiG terms, which benefits consumers in the short term by increasing their purchasing power.

"It also means that consumers who kept ZiG balances in their bank accounts are now able to purchase slightly more goods than what they could have bought in August 2025. If this momentum is maintained, it could significantly enhance confidence in the ZiG," said the CZI.

The industry body added that the steep fall in inflation largely reflects the fading effects of the September 2024 devaluation, which had sharply driven up the Consumer Price Index (CPI). With month-on-month inflation now well contained, CZI expects further easing in the coming months.

Read the original article on New Zimbabwe.