Zimbabwe's inflation rises to 4.8% in April due to fuel price increases

Zimbabwe's annual ZiG inflation rate increased by 0.4 percentage points to 4.8% in April, primarily driven by two fuel price increases during the month. The Reserve Bank of Zimbabwe RBZ had previously warned that inflation would remain elevated between March and June following these fuel price hikes. Initially, diesel and petrol prices rose to US$2.05 and US$2.17 per litre, respectively, from US$1.77 and US$1.71, and then further to US$2.11 and US$2.23. Although prices later decreased slightly to US$2.09 for diesel and US$2.08 for petrol, they remain elevated. Authorities attribute these increases to the Middle East conflict, but underlying cost pressures, including high taxes, levies, and significant free-on-board charges, also contribute. The Zimbabwe National Statistics Agency ZimStat reported that month-on-month ZiG inflation also rose to 1.1% in April from 0.5% in March, with price increases mainly in transport and food and non-alcoholic beverages. US dollar inflation also saw an increase, rising to 2.2% in April from 1.3% in March. This uptick in inflation occurs as authorities aim to maintain single-digit inflation under tight fiscal and monetary conditions, despite external shocks like fuel price fluctuations posing risks to price stability. Economist Vince Musewe noted that ZiG inflation has minimal impact on the highly dollarized informal sector, highlighting imported inflation as an inevitable problem for an import-reliant economy.