IMF sees early signs of economic recovery in Zimba...

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.