Africa-Press – Zimbabwe. THE Reserve Bank of Zimbabwe (RBZ) has projected elevated inflation rates for March, April and May, following a sharp increase in the price of fuel.
The warning signals growing pressure on businesses and consumers, as rising fuel costs ripple through the economy, driving up production, transport and import expenses, and ultimately pushing up the prices of goods and services.
Last week, the Zimbabwe Energy Regulatory Authority hiked fuel prices to US$2,17 per litre for petrol and US$2,05 for diesel, from US$1,77 and US$1,71, respectively.
In a statement, RBZ governor John Mushayavanhu said the bank’s Monetary Policy Committee is concerned about the significant pass-through effects of the recent oil price shock on domestic prices, driven by ongoing geopolitical tensions in the Middle East.
He said the committee noted that the rise in fuel prices constitutes a supply-side shock, which cannot be easily addressed through monetary policy.
“The increases in domestic fuel prices are likely to have second-round effects through adverse inflation expectations, which need an appropriate monetary policy response,” Mushayavanhu said.
“The month-on-month inflation will slightly increase in March, April and May 2026, before returning to its steady state levels from June 2026.”
He said there will be a slight upward shift in annual ZiG inflation, which, however, is expected to remain within single-digit levels throughout 2026 and the forecast period.
The ZiG month-on-month inflation rates for January and February were 0% and 0,1%, respectively, while the annual rates stood at 4,1% and 3,8%. Meanwhile, US dollar–denominated month-on-month inflation was 0,2% in January and 0,1% in February, with annual rates of 1% and 0,9%, respectively.
In response to the inflation uptick, the RBZ will maintain the bank policy rate at 35%. The central bank will also keep the current statutory reserve requirements unchanged: 15% for savings and time deposits, and 30% for demand and call deposits, applicable to both local and foreign currency accounts.
The sharp rise in fuel prices has already sparked price adjustments across the economy.
A survey by the Confederation of Zimbabwe Industries (CZI) confirmed that most firms are facing rising costs, not only for fuel but across a broad range of expenses. These include raw materials, transportation and logistics, imported inputs, as well as insurance and shipping.
The CZI survey found that most firms have faced substantial fuel cost increases since the start of the Iran conflict in February, with 62% reporting rises of more than 20%. Another 21% of firms indicated cost increases of 11–20%, while 14% reported more moderate rises of 6–10%. The CZI noted that businesses are likely to pass these additional costs on to the prices of their goods and services.
For More News And Analysis About Zimbabwe Follow Africa-Press
