Online Reporter
Samuel Kadungure
News Editor
FINANCE, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube yesterday (Thursday) presented the 2025 Mid-Term Budget and Economic Review, which highlighted the country’s stable inflation trends.
Minister Ncube said month-on-month inflation remained steady during the first half of 2025, with monthly ZiG inflation averaging 0,5 percent from February to June.
The Zimbabwe National Statistics Agency reported the first official ZiG annual inflation figures in April 2025, which stood at 85,7 percent, a figure which increased to 92,5 percent in June 2025.
Minister Ncube attributed the elevated annual inflation primarily to the base effect caused by the one-off depreciation of the ZiG/US$ exchange rate recently.
However, he projected a significant decline in annual inflation from October 2025, as the base effect dissipates.
Minister Ncube said in US$ terms, month-on-month inflation averaged 0,01 percent from February to June 2025, driven by decreases in food and non-food inflation.
The annual US$ inflation rate peaked at 15,1 percent in February 2025, but declined to 14 percent in June 2025.
Minister Ncube expressed optimism about inflation stability during the second half of 2025, supported by a tight monetary policy stance. Consequently, monthly inflation is expected to remain below three percent for the remainder of the year.
“Since the beginning of the year, the exchange rate remained largely stable against the US dollar on the willing buyer-willing seller market. The parallel market premium has been largely contained in 2025.
Encouragingly, the further liberalisation of the foreign exchange market through Statutory Instrument 34 of 2025 has not resulted in untoward pricing by retail businesses in the country, which reflects the alignment of the exchange rate. This notwithstanding, isolated incidences of exorbitant pricing were observed with some retailers pricing at a depreciated exchange rate with a view to discourage against the local currency payments,” he said.
Minister Ncube said Zimbabwe’s economy is a diverse mix of industries, with several sectors driving its growth.
“In terms of sectoral contribution, the structure of the economy, is now dominated by manufacturing (15,3 percent), mining and quarrying (14,5 percent), wholesale and retail trade (11,9 percent), financial and insurance services (10,8 percent), and agriculture (9,3 percent).
“Domestic economic developments during the first half of the year 2025 reaffirms the projected economic growth of six percent alludedto in the 2025 National Budget. This growth is expected to be driven by phenomenal growth in the agriculture sector, which is expected to grow by at least 21 percent.
“Growth is also expected to emanate from other sectors like information and communication (7,9 percent) and wholesale and retail trade (5,5 percent).
This growth projection is underpinned by the following assumptions – favourable agriculture season; improved electricity generation; low inflation and stable exchange rate; and subdued international commodity prices.
“From the expenditure approach, growth will be driven by strong domestic demand with robust increases in private consumption (6,5 percent) and public consumption (6,3 percent), supported by improved growth in both private (5,6 percent) and public investment (6,3 percent). Over the past six months, the manufacturing sector has recorded notable progress in industrial output and commercialisation, supported by Government interventions and private sector partnerships. However, persistent challenges such as energy shortages continue to hinder optimal performance. Therefore, the sector is now
projected to grow by 2,4 percent in 2025, down from the initial projection of 3,1 percent,” he said.
Minister Ncube said despite the subdued global growth prospects, geopolitical tensions, policy uncertainty, and low international commodity prices, the country’s external sector has demonstrated remarkable resilience.
The country’s foreign currency receipts have shown a notable increase, rising by 30,2 percent to US$6 billion from January to May
2025, compared to US$4,9 billion received during the same period in 2024.
This growth, he said, was primarily driven by an increase in export receipts, diaspora remittances, and loans. The resilience of Zimbabwe’s external sector is a testament to the country’s ability to adapt to challenging global economic conditions.
“The resilience is evidenced by the notable increase in foreign currency receipts, which rose by 30,2 percent to US$6 billion for the period from January to May 2025, compared to US$4,9 billion received during the same period in 2024. The growth was primarily driven by an increase in export receipts, diaspora remittances and loans. Export receipts and international remittances accounted for 55,9 percent and 23,4 percent of the total receipts, respectively, for the period January to May 2025,” said Minister Ncube, adding that remittances increased by 7,1 percent from US$593,2 million in the first quarter of 2024 to US$635,2 million in 2025.
“The remittances have had a favourable impact on the current account balance. To year end, remittances are projected to increase by 4,9 percent from US$2,6 billion in 2024 to US$2,7 billion in 2025, sustaining a positive current account balance. Given the strategic importance of the diaspora community, Government seeks to strengthen their role in the development of the country.
Government is finalising the formulation of the Diaspora Policy, which will outline measures to promote remittances at minimum cost and give guidelines on various investment initiatives,” he said, adding that direct investment inflows are estimated at US$184,9 million in the first quarter of 2025, up from US$103,5 million recorded in the corresponding quarter of 2024.
Minister Ncube said the inflows were mainly in the form of capital equipment, predominantly directed towards the mining and manufacturing sectors.
“During the quarter, 207 new investment licences were issued, marking a 44,8 percent increase compared to corresponding period in 2024. The successful launch of ZIDA’s digital investment license issuance system is anticipated to streamline processes, thereby enhancing investor confidence and operational efficiency.
“Direct investment inflows are projected to grow to over US$600 million in 2025 with the major recipients being energy, mining and manufacturing sectors. During the first six months of the year, ZIDA licenced 178 new investment projects, with a cumulative projected value of US$1,4 billion, distributed as follows – energy and mining (36 percent), manufacturing (24 percent), agriculture and agro-processing (20 percent), and tourism, ICT, and services (20 percent),” he said.
Minister Ncube said the 2025 national budget was anchored on a macro fiscal framework that predicted 6 percent GDP growth, with
revenue collections totalling ZiG270,3 billion (19,6 percent of GDP) and overall expenditures of ZiG276,4 billion (20,1 percent of GDP).
He said a budget deficit ZiG6,1 billion (0,4 percent of GDP) is expected, which translates to US$168,4 million in US dollar terms.
Though the first half of 2025 saw both inflation and exchange rates remain relatively stable, the budget performed below target in local currency terms, but significantly above target in foreign currency terms.
Minister Ncube said revenue collections from January to June 2025 were ZiG101,2 billion, short of the target ZiG118,1 billion, while expenditures were ZiG98 billion, also below the target ZiG127, billion.
Minister Ncube said the country recorded a budget surplus of ZiG3.3 billion during the first six months of 2025. In US dollar terms, revenue collections reached approximately US$3.68 billion, surpassing
the target US$3.28 billion, while expenditures were US$3.67 billion, slightly above the target US$3.54 billion. Tax revenue accounted for a significant 96 percent of total revenue, with non-tax revenue making up the remaining four percent.
Minister Ncube also outlined fiscal plans for 2026, highlighting the need to balance opportunities and challenges.
He said Government seeks to consolidate fiscal sustainability, enhance domestic revenue mobilization, and promote inclusive economic growth.
Proposed tax-related interventions will fund key developmental programmes, including those outlined in the National Development Strategy 2 (NDS2) – expand the tax base by incorporating emerging sectors and support the formalization of economic activities through digital and financial inclusion of Small to Medium Enterprises (SMEs); tax administration reforms – focus on digitalization, data integration, compliance, and strengthened enforcement measures: and legislative and regulatory reforms – reduce the cost of compliance and tighten loopholes exploited through tax avoidance practices.
He said Government will review the existing tax system to address concerns raised by taxpayers and business representative organizations.
Minister Ncube said from January to May 2025, Government mobilised ZiG685,8 million (US$25,4 million) from the levy on sugar content in beverages, part of which will be allocated for therapy and procurement of cancer equipment for diagnosis. In addition, the country received US$148,1 million in development assistance during the first half of 2025, majority of which went towards the health sector (US$95,8 million), emergency response (US$18,7 million), and education (US$8,8 million).
