Producer price Index dips

Tapiwanashe Mangwiro

PRODUCER prices showed signs of easing cost pressures in the non-agricultural sector in March 2025, underscoring a mixed but ultimately positive outlook for the economy, the latest report from the Zimbabwe National Statistics Agency (ZimStat) shows.

The ZiG Producer Price Index (PPI), excluding agriculture, dipped slightly to 211.28 in March 2025 from 211.60 in February, a month-on-month decline of 0,1 percent that contrasts with a 0,8 percent rise in February.

“The month-on-month rate of change in March 2025 was –0,1 percent, shedding 0,9 percentage points on the February 2025 rate of 0.8 percent,” ZimStat reported, signalling moderating cost push inflation in manufacturing and services.

Beneath the mild headline drop, sector dynamics diverged.

Mining activity underpinned a small uptick in the weighted PPI, even as manufacturing categories from paper to beverages held steady.

“The mining and quarrying contributed to the increase of the index, while manufacturing categories from paper to beverages registered no movement,” ZimStat said.

Export-oriented firms have continued to enjoy price windfalls, compensating for softer domestic demand.

In dollar terms, the PPI remained flat at 106.38, with the month-on-month rate easing by 0,8 percentage points to zero. However, imported inflation remains elevated, as US dollar-priced inputs climbed 13,2 percent year on year from March 2024 to March 2025, reflecting sustained external cost pressures.

“The USD Producer Price Index (PPI) excluding agriculture was 106.38 in March 2025 and 106.38 in February 2025. The month-on-month rate of change in March 2025 was 0,0 percent, shedding 0,8 percentage points on the February 2025 rate of 0,8 percent,” the report stated.

Rudo Chikore, senior economist at R&E Consultancy, welcomed the dip but cautioned that it remains fragile.

“A –0,1 percent monthly decline in the PPI may signal a plateauing of cost-push inflation, but without sustained improvements in power supply and transport logistics, producers will struggle to convert lower input costs into price relief for consumers,” Ms Chikore said, pointing to persistent electricity shortfalls at Kariba Dam and rising diesel prices as upside risks to margins.

Tendai Moyo of Midlands State University’s Graduate School of Business urged restraint in reading too much into one month’s data.

“Volatility in commodity prices, especially nonferrous metals, can distort short-run PPI readings. The fact that mining contributed to lifting the weighted PPI suggests that export-oriented firms are still enjoying price windfalls, even as domestic processors remain under strain,” she said.

Ms Moyo noted that stable readings in leather goods, plastics, and food processing reflect either steady input costs or limited producer pricing power.

With global base metal prices retreating from early 2024 peaks, margins in the local mining sector may narrow in the coming months, potentially subtracting from the weighted PPI, which blends ZiG and US dollar indices geometrically.

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