Zimbabwe’s economy is projected to grow by six percent in 2025, according to the International Monetary Fund, positioning it as the strongest performer in Southern Africa as agricultural recovery and record gold prices drive a rebound from drought-induced contraction.
The IMF Executive Board concluded its 2025 Article IV consultation with Zimbabwe on October second, projecting growth would accelerate from one point seven percent in 2024. The recovery follows a severe drought that lowered agricultural output by 15 percent and reduced hydropower generation, causing widespread power shortages.
The projection places Zimbabwe ahead of regional economies, with Southern Africa expected to grow at two point two percent in 2025 while South Africa, the region’s largest economy, is forecast to expand by just zero point eight percent. South Africa’s economy is projected to grow by zero point nine percent according to World Bank estimates, supported mainly by financial services.
“Zimbabwe is experiencing a degree of macroeconomic stability despite lingering policy challenges,” IMF mission chief Wojciech Maliszewski said in a statement following the consultation mission to Harare from June fourth to June 18th. The Fund credited tighter monetary policies, including halting quasi-fiscal operations by the Reserve Bank of Zimbabwe, for helping reduce inflation and stabilize the local currency.
Monthly inflation dropped to zero point three percent in June 2025 from significantly higher levels in late 2024, after the central bank raised policy rates and increased reserve requirements. The Zimbabwe Gold currency, introduced in April 2024 to replace the Zimbabwe dollar, has stabilized following a sharp devaluation in September 2024.
Agriculture Minister Anxious Masuka told state media the sector expects strong recovery after improved rainfall. Total cereal production reached two point nine million metric tons according to the Second Round Crops, Livestock and Fisheries Assessment, driven by expanded maize cultivation and drought-resistant traditional grains.
Record gold prices and sustained remittance inflows are supporting the current account surplus, which the IMF projects will widen in 2025. The Fund noted that fiscal revenues increased sharply to 14 point seven percent of GDP through reduced tax exemptions and improved collection.
Finance Minister Mthuli Ncube said in the budget statement that growth projections assume continued monetary discipline and structural reforms under the government’s Vision 2030 development plan.
Challenges persist despite the positive outlook. The IMF warned that without deeper reforms, medium-term growth would slow to three point five percent as fiscal financing needs crowd out private sector credit. Public debt remains at 72 point nine percent of GDP, with external arrears totaling nearly 12 billion dollars blocking access to international financing.
Zimbabwe continues reengagement with international creditors through the Structured Dialogue Platform, seeking debt resolution and arrears clearance. The IMF noted that a stronger policy reform track record, potentially supported by a Staff Monitored Program, could advance these efforts.
The World Bank estimates climate change could erode up to 12 percent of GDP annually, while adaptation costs would be less than one percent of GDP. The 2023/24 drought caused approximately 363 million dollars in damages and resulted in a three point two percent GDP contraction.
Foreign reserves remain critically low at zero point nine months of import cover despite recurring current account surpluses, the IMF reported. The central bank projects reserves will improve gradually if current policies are maintained.
