HARARE, Aug. 20 (Xinhua) -- Greater price stability in the first half of 2026 has helped Zimbabwe mitigate the impact of Middle East oil price shocks, Reserve Bank of Zimbabwe Governor John Mushayavanhu said on Thursday.
Delivering the 2026 mid-term monetary policy statement, Mushayavanhu noted that single-digit inflation and exchange rate stability from January through July supported increased economic activity across all sectors.
"The anchoring of inflation expectations has also reinforced confidence in the local currency and strengthened monetary policy effectiveness, thereby laying the foundation for sustainable investment and economic growth," Mushayavanhu said.
He said economic performance in the first half of 2026 points to continued robust economic growth, with the economy projected to grow by 5 percent in 2026 from 8.3 percent in 2025, benefiting mainly from strong performance of the agriculture and mining sectors.
The annual inflation of local Zimbabwe Gold (ZiG) currency is projected to average about 5 percent by the end of the year, with month-on-month inflation remaining below 1 percent, Mushayavanhu said.
However, he warned that the outlook remains dominated by risks from Middle East conflict spillovers, volatile commodity prices, and anticipated super El Nino weather conditions.
On the transition toward a mono-currency system, Mushayavanhu said significant progress has been made during the first half of the year in meeting the conditions precedent for the smooth, exclusive adoption of the ZiG.
"The Reserve Bank of Zimbabwe reiterates that the transition to mono-currency will be conditions-based and not date-dependent," Mushayavanhu said, adding that foreign currency accounts will be maintained and U.S. dollar-denominated contracts fulfilled in the same currency upon transition.
Zimbabwe currently operates under a multicurrency system where foreign currencies co-circulate with the domestic ZiG. ■