IMF sees early signs of economic recovery in Zimbabwe

 

ZimNow Business Desk

The International Monetary Fund, after visiting Harare from June 4 to 18, 2025, reports Zimbabwe is starting to recover economically. Growth forecasts, lower inflation, and stabilized currency offer hope after years of turmoil.

 

Key recovery drivers

  • Launch of the ZiG (Zimbabwe Gold) currency
  • Tighter monetary policy and reduced Reserve Bank quasi‑fiscal activities
  • Broader tax enforcement and fewer VAT exemptions
  • These helped bring inflation down and narrowed the gap between official and parallel exchange rates.

 

Economic highlights:

  • GDP expected to grow 6% in 2025, rebounding from 2024’s drought‑induced losses
  • Government revenue rose to 18% of GDP, thanks to better tax compliance and anti‑smuggling efforts

 

Ongoing challenges

  • Rising public sector wage bills and debt repayment obligations
  • Wider fiscal deficit, linked to excessive Treasury bill use and overdraft borrowing that previously fueled currency depreciation
  • Though inflation fell to ~0.5% per month (Feb–May 2025), the economy remains fragile
  • Removal of the restrictive SI 81A regulation—encouraging less dollarization by ending forced use of official rate 

The IMF says Zimbabwe is showing early signs of economic stabilization, which is promising—especially after the shocks of 2024. While inflation has cooled and growth is rebounding, fiscal risks remain real.

The report points out that sustaining these improvements will depend on continued policy discipline, prudent debt management, and reform delivery.

 

 

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