Zimbabwe’s economy is poised for a significant recovery, with the International Monetary Fund (IMF) projecting a 6% growth rate for 2025, driven by improved agricultural output, record-high gold prices, and strong remittances from Zimbabweans abroad.
The forecast marks a sharp rebound from last year’s 1.7% growth, which was hampered by a severe drought that slashed crop yields and hydroelectric power production.
In a statement released, following a review of Zimbabwe’s economy, the IMF noted that the southern African nation is achieving “a degree of macroeconomic stability” despite ongoing policy challenges. The government’s own growth projection is slightly more optimistic at 6.6%.
The recovery comes as Zimbabwe grapples with restructuring its debt and clearing arrears with creditors. However, the IMF cautioned that growth could slow to 3.5% in the medium term due to low confidence in the sustainability of economic stabilization efforts and heavy government borrowing. The issuance of Treasury bills to address a buildup of domestic arrears since last year risks crowding out private sector credit, the Fund warned, urging a tighter fiscal policy to address financing constraints.
Zimbabwe’s introduction of the gold-backed ZIG currency in April 2024 has yet to fully resolve disparities between the official and parallel foreign exchange rates, the IMF added, highlighting persistent challenges in stabilizing the economy.
