Key points
- The IMF approved the second review of Zimbabwe’s 10-month Staff-Monitored Programme.
- It projects 5% real GDP growth in 2026, slowing to 3.5% in 2027 on drought risk.
- All end-June quantitative targets and structural benchmarks were met.
The International Monetary Fund has approved the completion of the second review under Zimbabwe’s 10-month Staff-Monitored Programme, saying 2026 marks a turning point for the economy.
In a statement, IMF management said the approval reflects continued progress in consolidating macroeconomic stability and building a record of policy implementation.
That record supports arrears clearance, debt resolution and re-engagement with the international community.
Growth and stability
Economic activity continued to expand in the first half of the year. Annual ZiG inflation stayed in low single digits at 3.7% in September, and the exchange rate was broadly stable.
The external position benefited from strong mineral exports, favorable commodity prices and resilient remittances.
Fiscal revenue also beat expectations, producing a stronger-than-programmed primary balance.
The IMF projects real GDP growth of 5% in 2026, with inflation in single digits and a current account surplus.
However, growth is expected to slow to 3.5% in 2027 because of an El Niño-related drought, before recovering in 2028.
Risks tilt to the downside, particularly from a more severe drought and renewed commodity and energy price pressures.
Programme performance and fiscal advice
Implementation through end-June was strong. All quantitative targets, structural benchmarks and continuous commitments were met.
Moreover, all indicative targets were met except the floor on protected social and priority spending, which suffered from persistent implementation bottlenecks.
The Fund urged authorities to use stronger revenue to build buffers for food security and energy pressures.
It said the 2027 budget should rest on prudent revenue and financing assumptions to avoid a structural deficit while leaving room for priority social spending.
In addition, it called for tighter expenditure controls, better cash planning and transparent liability management.
Monetary policy and state firms
The Reserve Bank of Zimbabwe has kept policy appropriately tight, which the IMF said supports low inflation and currency stability.
The Fund welcomed progress toward a more transparent foreign exchange trading platform and a gradual move to a market-based system.
It also called for stronger oversight of Mutapa and other state-owned enterprises, including borrowing controls and published audited accounts.
