Published: 2 hours ago

Zimbabwe's economy is projected to grow by 6 percent in 2025, supported by a robust agricultural season, record-high gold prices, and sustained remittance inflows, according to the International Monetary Fund (IMF).

In its 2025 Article IV Consultation Report, released on Friday, the IMF noted that growth would rebound from last year's slowdown as extreme weather shocks eased and terms of trade improved, but urged the government to implement further reforms to sustain the momentum.

"Tighter monetary policies - including the halting of quasi-fiscal operations and monetary financing by the Reserve Bank of Zimbabwe (RBZ) - have helped reduce inflation and ease exchange rate pressures," the report said. Inflation is expected to remain relatively low this year, underpinned by tight liquidity management and ongoing efforts to stabilise the Zimbabwe Gold (ZiG) currency.

"GDP growth is expected to rebound to 6 percent this year and the current account surplus to widen, both driven by a good agricultural season, record-high gold prices, and sustained remittances inflows," the IMF said.

The Fund emphasized the need for a comprehensive reform package to address structural weaknesses in public finances, improve fiscal discipline, and enhance the coherence of monetary and exchange rate policy.

On the fiscal front, the IMF recommended rationalizing generous corporate tax incentives, strengthening tax administration, and addressing spending pressures, particularly the public wage bill, while ensuring room for targeted social spending. It also underscored the importance of planning to prevent the accumulation of arrears.

"A degree of macroeconomic stability has been maintained recently. Tighter policies - notably the halting of quasi-fiscal operations and monetary financing by the central bank - have helped significantly reduce inflation and exchange rate pressures," the Fund noted.

Regarding monetary policy, the IMF encouraged Zimbabwe to transition towards a transparent, market-based foreign exchange system, with the exchange rate determined by market conditions and reduced RBZ intervention. It also urged reforms to strengthen liquidity management, improve the role of the ZiG, and provide clarity on the mono-currency transition plan.
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