KEY POINTS
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Zimbabwe’s GDP growth is projected to reach 6% in 2025, driven by agriculture, infrastructure, and foreign investment.
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The ZiG currency is gaining credibility, supported by monetary tightening and foreign reserves, while inflation remains subdued.
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Debt re-engagement with IMF and AfDB, plus targeted financing, aims to unlock concessional funding and support SMEs.
Zimbabwe’s economy is showing signs of renewed vitality, with authorities and analysts forecasting a robust growth rate of and displaying confidecne in the ZiG. This outlook follows a recovery from the El Niño-induced contraction in 2024 and reflects stronger performances across agriculture, infrastructure, and investment flows.
According to projections from the Ministry of Finance and corroborated by research from FBC Securities, the country’s real gross domestic product (GDP) is expected to reach 6 percent by year-end. The recovery comes after growth plummeted to just two percent last year when severe drought led to an 18 percent contraction in agriculture—a key contributor to GDP.
A significant contributor to the optimism surrounding Zimbabwe’s economic prospects is the growing stability of the Zimbabwe Gold ZiG currency. Introduced in April 2024, the ZiG has so far proven resilient, supported by tighter monetary controls and increased foreign reserve backing.
ZiG Currency, Reforms Bolster Investor Sentiment Amid Inflation Control
FBC Securities noted in its outlook that “annual inflation is projected to close 2025 within the 25–30 percent range, assuming no major fiscal slippages or parallel market shocks.” The Reserve Bank of Zimbabwe (RBZ), in its second-quarter economic snapshot, echoed this cautious optimism, revealing that “monthly inflation has averaged just 0.5 percent since February 2025.”
The country’s debt re-engagement strategy is also gaining momentum. Efforts anchored by the African Development Bank and the International Monetary Fund aim to bring Zimbabwe back into the fold of international concessional lending. FBC Securities observed that “if structural benchmarks are met, concessional funding could be unlocked, easing exchange rate volatility and bolstering macroeconomic stability.”
The IMF, in its recently concluded 2025 Article IV consultation, acknowledged Zimbabwe’s macroeconomic progress, citing potential for future external financing access once re-engagement conditions are fulfilled.
On the trade front, Zimbabwe is expected to record a moderate widening of its trade deficit during the second half of 2025 due to rising import demand. However, a strong rebound in agricultural exports, along with solid mineral revenues—particularly from gold—are expected to cushion the imbalance.
While large-scale exporters are benefiting from improved foreign currency flows, many Small and Medium Enterprises (SMEs) continue to face challenges in accessing forex, a longstanding concern that threatens inclusive economic participation.
To address liquidity issues, the central bank recently introduced a Targeted Finance Facility, aimed at easing working capital constraints, particularly in priority sectors such as agriculture, manufacturing, and infrastructure.
Infrastructure development has also become a cornerstone of government growth strategy, with several public and private sector projects underway across transportation, energy, and water systems. Businesses involved in these projects and firms earning revenues in US dollars have continued to attract funding and investor interest.
Both the IMF and World Bank have endorsed Zimbabwe’s reform trajectory. The World Bank noted that “Zimbabwe’s recovery from 2024’s two percent growth slump is driven by favorable climate conditions and strong commodity prices.” It also praised policy efforts such as inflation targeting and the adoption of the ZiG currency.
As 2025 progresses, policymakers remain cautious but optimistic, stressing that sustained discipline and continued engagement with international institutions will be key to unlocking long-term stability.
