Zimbabwe’s economy was forecasted in 2022 by the Ministry of Finance to grow by 3.8% in 2023 and that inflation would remain stable at below 3% per month throughout the year driven by mining, construction and tourism. Agriculture production was projected to increase as well as rain levels are beginning to normalize. Despite all of this good news, the economy is still unstable as 2023 gets underway. As inflation, commodity prices, wage pressures, and the volatility of the Zimbabwean dollar continue to rise, Zimbabwe's economy continues to deteriorate.

Inflation

According to the Reserve Bank of Zimbabwe (RBZ) month on month inflation rate in December 2022 stood at 2.42%, an increase with 0.6% from 1.8% in November 2022. The increase in month-on-month can be attributed to Christmas spending which increased the aggregate demand. Month-on-month inflation has been slowing down for the past 3 months. In 2022 Zimbabwe had the highest monthly inflation rate June which stood at 30.7%. The annual inflation rate stands at 243.76%. According to Trading Economics econometric models in the long-term, the Zimbabwe Inflation Rate is projected to trend around 50%.

According to ZimStat the consumer price index (CPI) for December 2022 stood at 13 669. 80 compared to 13 349. 40 in November 2022 and 3 977. 46 in December 2021. This indicates prices of goods continue to steadily rise. According to the Consumer Council of Zimbabwe (CCZ), the cost of living for a family of six rose by 14,2% to ZWL$355 137 in December 2022 as a result of price shocks during the holiday festive season. In November 2022, the cost of living for a family of six stood at ZWL$310 910.

Diesel and Petrol Prices in Zimbabwe on Friday, 06 January 2023

On December 29th, 2022, the Zimbabwe Energy Regulatory Authority (ZERA) announced a marginal increase in fuel prices, which was still in effect as of January 6th, 2023. Diesel prices increased by 1.85% from US$1.62 to US$1.65 per litre, while the price of petrol increased by 1.35% from US$1.48 to US$1.50 per litre. As of January 6, 2023, the price of diesel in ZWL$ per litre is ZWL$1 016.49 and the price of petrol in ZWL$ per litre is ZWL$1 119.82.In the recent months, fuel price has remained stable, diesel dropped from as high as US$1.88 per litre while petrol dropped from as high as US$1.77. The prices of gas are usually affected by location and demand. In places with power outages and frequent load shedding, prices of gas are usually higher. ZERA increased the prices of liquid petroleum gas on the 12th of December 5 cents from US$1.78 per kg to US$1.83 per kg.

Exchange rate

Zimbabwe's interest rates remain at 200% and have not altered in the recent months. When the RBZ auction rate closed it stood at ZWL$671.4466 per US$1. Despite the fact that the RBZ auction rate has been sitting at ZWL$671.4466 per US$1 since the 13th of December 2022, the Zimbabwean dollar has weakened. It is now trading at 960 to the US dollar on the parallel market, a sharp decline from two months earlier when it was trading at 860 to US$1.