Online Reporter
Tapiwanashe Mangwiro
THE International Monetary Fund (IMF) has lauded the milestones Zimbabwe has posted in its ongoing policy reforms to improve economic performance and engender long-term stability in its 2025 Article IV Consultation report.
The commendation from one of the world’s most influential multilateral lenders signals a significant vote of confidence in the country’s rapidly evolving economic trajectory.
An IMF staff team led by Mr Wojciech Maliszewski assessed Harare’s macro-economic situation from June 4 to 18, and in its report after the exercise, applauded the progress the authorities have made in their efforts to tame inflation, bolster the ZiG, and lay the foundations for sustainable growth.
The multilateral lender noted the milestones Zimbabwe has achieved under its continuous policy reform programme, which is expected to entrench the prevailing macro-economic stability and foster inclusive growth.
The Government is currently implementing a coterie of economic reform initiatives, backed by tight fiscal and monetary policies designed to manage inflation and stabilise the economy.
These include maintaining a high bank policy rate, controlling Government spending and limiting the availability of credit.
The goal is to curb inflation, stabilise the exchange rate and promote sustainable economic growth.
“Zimbabwe is experiencing a degree of macro-economic stability despite lingering policy challenges,” Mr Maliszewski said, adding that the transfer of quasi-fiscal operations from the Reserve Bank of Zimbabwe (RBZ) to Treasury and the adoption of tighter monetary and fiscal policies have been instrumental in steadying the ZiG.
After years of hyperinflation, the local currency has stabilised, with month-on-month inflation averaging just 0,5 percent from February through May 2025, while the spread between the formal willing buyer willing seller (WBWS) rate and the parallel market has narrowed to around 20 percent.
“The IMF’s recognition of Zimbabwe’s monetary discipline is a pivotal endorsement,” says economist Ms Gladys Shumbambiri-Mutsopotsi.
“Through halting quasi fiscal operations and tightening liquidity, authorities have anchored inflation expectations and restored confidence among businesses and households. This sets the stage for sound financial planning across the economy.”
Echoing this sentiment, economist Dr Prosper Chitambara said: “Stabilising exchange rates sends a powerful signal to investors. The IMF’s praise for a stabilised ZiG and a more transparent WBWS mechanism suggests that Zimbabwe is on track to attract both domestic and foreign capital.”
Bolstered by macroeconomic stability, the IMF projects gross domestic product growth of 6 percent in 2025. This rebound follows a sharp slowdown in 2024, when drought trimmed agricultural output by 15 percent and lower commodity prices weighed on mining.
However, better rainfall this season, the surge in gold prices on global markets and increased mining production are driving a strong recovery this year. Zimbabwe’s current account has also strengthened, supported by rising export earnings and a narrowing parallel market exchange rate premium.
“Improved climate conditions and buoyant gold prices have injected fresh momentum into key sectors,” said Dr Chitambara. “Agriculture and mining are the backbone of Zimbabwe’s economy and their resurgence is critical for sustaining momentum.”
The IMF highlighted a sharp rise in revenue to 18 percent of GDP in early 2025, attributable to measures such as reduced Value Added Tax reliefs and the taxation of Covid-19-era allowances. Nonetheless, higher public sector wages, capital outlays for regional summits and legacy debt servicing have strained the budget.
The fund’s near-term recommendation is for Zimbabwe to close the fiscal gap without resorting to monetary financing or further arrears buildup, while safeguarding essential social spending.
“Raising revenues is only part of the story,” noted Ms Shumbambiri-Mutsopotsi.
“The real test lies in rationalising expenditure, strengthening public spending controls and ensuring that resources reach priority areas. The 2026 Budget will be pivotal in demonstrating Zimbabwe’s commitment to fiscal prudence.”
Looking ahead, the IMF recommended enhancing the WBWS market through transparent price-setting and a gradual shift towards a market-determined exchange rate. Introducing an effective RBZ deposit facility, phasing in indirect monetary instruments and managing volatility through selective FX interventions will further solidify the central bank’s toolkit.
These measures are designed to support the country’s long-term goal of a mono currency system by 2030.
“The transition to a single currency demands solid market infrastructure,” said Dr Chitambara. “Transparent exchange mechanisms and full utilisation of Authorised Dealers for export proceeds will promote wider acceptance of the ZiG and reduce dollarisation.”
Beyond macroeconomic policy, the IMF stressed the need for governance reforms, particularly within the Mutapa Investment Fund and State-owned enterprises, to mitigate fiscal risks and enhance transparency.
The IMF said strengthening audits, reporting and disclosure standards for State institutions aligns with international best practices and signals to creditors that Zimbabwe is serious about accountability.
Ms Shumbambiri-Mutsopotsi echoed similar sentiments: “Improved governance is the cornerstone of re-engagement with international partners. Clear, credible financial statements will pave the way for concessional financing and debt restructuring, unlocking resources for development.”
The IMF affirmed its readiness to resume discussions for funding support once decisive policy measures have been implemented. The global lender also pledged to continue providing technical assistance in revenue mobilisation, expenditure control and macroeconomic statistics.
Although commercial funding support remains on hold due to debt arrears and sustainability concerns, the fund’s active engagement reflects its confidence in Zimbabwe’s reform trajectory.
With macroeconomic stability gaining traction, growth prospects strengthening, and a coherent policy framework in place, the country’s prospects look promising.
The IMF’s positive assessment paints an encouraging picture, particularly at a time when the economy appears to be rapidly stabilising after years of volatility.
