Zimbabwe’s annual inflation rate dropped below 10% last month, reaching 4.1% from 15% in December, marking a notable milestone for a nation once defined by hyperinflation and trillion-dollar banknotes, Bloomberg reported.

Authorities attribute the slowdown to tighter monetary policy, restrained fiscal spending, and efforts to back the new ZiG currency with gold and foreign reserves. The central bank has focused on curbing liquidity surges that previously drove rapid currency depreciation and sharp price increases.

External factors have also played a role. Improved terms of trade, including lower oil prices that reduce import costs and rising gold and platinum prices that boost export earnings and reserves, have supported the moderation in inflation.

The International Monetary Fund (IMF) signalled cautious optimism, approving a 10-month staff-monitored program for Zimbabwe earlier this month. The lender said inflation in 2026 is “expected to remain in single digits, reflecting tight monetary conditions and a more stable foreign-exchange market.”

Sustained price stability could reduce investor concerns about Zimbabwe’s risk profile and unlock investment in its mineral resources, including lithium and platinum, which are critical to global energy-transition supply chains.

Skepticism persists, however. Zimbabwe has previously declared victories over inflation, only for gains to unravel amid policy reversals, political pressures, or renewed currency instability. Many citizens still recall the hyperinflation years less than two decades ago, when pensions were wiped out, salaries became meaningless, and prices doubled within hours. At its peak, Zimbabweans required trillions of dollars for basic goods such as bread.