Online Reporter
Nqobile Bhebhe, [email protected]
ZIMBABWE has reached another significant milestone in its economic reform and international re-engagement drive after the International Monetary Fund (IMF) Management approved the completion of the first review under the country’s 10-month Staff-Monitored Programme (SMP), strengthening confidence in the country’s macroeconomic reforms and its path towards arrears clearance and debt restructuring.
The positive assessment signals growing international confidence in Zimbabwe’s policy direction after the country successfully met all end-March quantitative targets and structural benchmarks under the programme.
The outcome enhances the country’s credibility with international creditors, investors and development partners while reinforcing prospects for sustainable economic growth and financial stability.
A major highlight of the review was the IMF’s endorsement of the Reserve Bank of Zimbabwe’s tight monetary policy stance, which the Fund said has helped contain inflationary pressures and stabilise the exchange rate.
The IMF also welcomed the operationalisation of the ZiG-denominated term deposit facility, describing it as an important milestone in the gradual transition towards market-based monetary policy instruments that will deepen domestic money markets and strengthen monetary policy transmission.
In a statement, the IMF said “IMF Management has approved the completion of the first review under Zimbabwe’s 10-month Staff-Monitored Program (SMP).
“Programme implementation through end-March 2026 was strong, with all quantitative targets and structural benchmarks met and most indicative targets observed.”
The fund said the successful implementation of the programme demonstrates Zimbabwe’s commitment to reforms aimed at restoring macroeconomic stability.
“Completion of the review marks an important step in consolidating recent stabilisation gains and strengthening
Zimbabwe’s track record of policy implementation in support of arrears clearance, debt restructuring and re-engagement with the international community,” the IMF said.
The fund noted that Zimbabwe’s economy has remained resilient despite a more challenging global environment, supported by improved agricultural output, robust mining activity and favourable international gold prices.
“Zimbabwe’s economy has remained resilient despite a more challenging external environment.
“Growth remained strong in 2025 at 8,3 percent and continued into early 2026, supported by improved agricultural production, robust mining activity, and favourable gold prices. Inflation has remained low, reflecting tight monetary conditions and relative exchange rate stability.”
Maintaining single-digit inflation is a critical achievement for Zimbabwe’s economic recovery agenda as it helps restore purchasing power, improves business planning and strengthens investor confidence.
For households, reduced inflationary pressures help preserve incomes and savings, while for the wider economy this means exchange rate stability, lower borrowing costs and sustainable economic growth.
The IMF projects Zimbabwe’s economy to expand by five percent this year before moderating to 4,2 percent over the medium term, while inflation is expected to remain in single digits under continued prudent macroeconomic management.
Although the current account surplus is projected to narrow, it is expected to remain robust, with the Fund identifying a possible major El Niño weather event and renewed conflict in the Middle East among the key downside risks.
The review found that Zimbabwe met all end-March quantitative targets, reflecting strong adherence to agreed policy commitments.
“Programme implementation was strong. All end-March quantitative targets were met, including those relating to the primary budget balance, net international reserves, Reserve Bank of Zimbabwe credit to the non-financial public sector, external borrowing and monetary base growth.
“Most indicative targets were observed, although the indicative target on protected social and priority spending was missed. The end-March and end-June structural benchmarks were completed and the authorities are making progress toward subsequent reform commitments.”
On fiscal policy, the IMF said prudent public financial management remained central to the programme, with the fiscal primary balance outperforming expectations on the back of stronger-than-anticipated revenue collections.
“The programme supports the authorities’ commitment to maintain spending within the approved 2026 national budget, while saving additional revenues to build buffers for potential food-security needs in 2027.
“The programme also supports commitments to contain fiscal risks from gold delivery incentives, a rules-based approach to early redemptions and other liability-management operations, and stronger safeguards for domestic arrears clearance.
“Strengthening budget execution, commitment controls, public financial management, and domestic arrears clearance will be critical to preventing new arrears and safeguarding fiscal credibility.”
The IMF gave particular recognition to the Reserve Bank of Zimbabwe’s monetary policy framework, saying the central bank should maintain its disciplined policy stance until confidence in the ZiG is firmly established.
The local currency is backed by gold and foreign currency reserves, with both reserve money and broad money fully covered by foreign currency reserves.
“This stance should continue until inflation expectations are firmly anchored and confidence in the local currency strengthens. Staff welcomes the operationalisation of the ZiG-denominated term deposit facility as part of a gradual shift toward more market-based instruments.
“Over time, reducing reliance on non-negotiable certificates of deposit would help strengthen monetary transmission and support domestic money market development.
“Staff also welcomes the authorities’ plans to develop a comprehensive strategy to further liberalise the foreign exchange market and reform the foreign exchange intervention framework.”
The Fund also underscored the importance of governance and structural reforms in sustaining macroeconomic stability and strengthening investor confidence.
“Staff welcomes the authorities’ commitment to strengthening social protection systems, while the missed indicative target on protected social and priority spending underscores the need to improve budget execution and ensure timely support to vulnerable groups.
“Continued progress in public financial management, governance, and fiscal risk management will also be important to reinforce transparency, accountability and confidence in the authorities’ policy framework.”
The IMF said sustained implementation of the Staff-Monitored Programme, together with ongoing efforts to reconcile debt data and develop a credible arrears clearance and debt resolution strategy, would advance discussions with external partners and support Zimbabwe’s next phase of international re-engagement.
“The programme also supports the authorities’ broader re-engagement agenda. Continued progress under the SMP, together with ongoing efforts to reconcile debt data and develop a credible arrears-clearance and debt-resolution strategy, will help advance discussions with external partners and support the next stages of Zimbabwe’s re-engagement process.”
An IMF Staff-Monitored Programme (SMP) is a framework through which the Fund works with a member country to monitor the implementation of economic policies and reforms without providing financial assistance.
The programme allows the IMF to assess progress on fiscal, monetary, structural and governance measures, while helping countries build a track record of sound policy implementation.
For Zimbabwe, the SMP is an important component of its broader arrears clearance, debt restructuring and international re-engagement strategy, as successful completion of programme reviews strengthens confidence among creditors, investors and development partners.
