Zimbabwe GDP to grow by 4,8%

The International Monetary Fund (IMF) has reported that Zimbabwe's real gross domestic product is expected to grow by approximately 4.8 percent in the current year, driven primarily by robust performances in the mining and agriculture sectors. Following the conclusion of a visit by the IMF team led by Mr. Wojciech Maliszewski, the organization also commended the measures introduced by the Ministry of Finance, Economic Development, and Investment Promotion, along with the Reserve Bank of Zimbabwe, aimed at stabilizing the foreign exchange market and reducing inflation.

In a statement, Mr. Maliszewski stated that Zimbabwe's economy has been continuing its recovery following the impact of COVID-19. He noted that this growth is forecasted to continue, with real GDP growth at 4.8 percent in 2023, supported by strong activity in mining and improvements in agriculture and energy sectors due to structural reforms. However, growth is expected to slow to 3.5 percent in 2024, influenced by a decrease in global demand for minerals and weather-related impacts on agriculture.

The IMF mission noted improvements in Zimbabwe dollar inflation and exchange rate stability over recent months, driven by measures taken to tighten Zimbabwe dollar liquidity conditions and the removal of surrender requirements on domestic sales in foreign currency. Nevertheless, the parallel foreign exchange market premium remains high at over 30 percent, and Zimbabwe dollar inflation remains elevated.

The IMF emphasized the importance of implementing key economic policy reforms identified in previous Article IV consultations to fully restore macroeconomic stability. It stressed the need to address the Reserve Bank of Zimbabwe's quasi-fiscal operations to mitigate liquidity pressures, maintain lower inflation expectations, and complement these measures with a more robust liquidity management framework.

Additionally, the IMF called for fiscal policies, including quasi-fiscal operations, to align with short-term stabilization objectives and urged further acceleration of foreign exchange market reform to enhance exchange rate flexibility and transparency.

Structural reforms aimed at improving the business environment and governance are considered vital for sustained, inclusive growth and supporting Zimbabwe's development goals outlined in the National Development Strategy 1 (2021-2025).

The IMF further emphasized the importance of addressing debt overhang for sustainable development. It pledged to provide policy advice and technical assistance in areas such as revenue mobilization, expenditure control, financial supervision, debt management, economic governance, and macroeconomic statistics.

Zimbabwe is already engaging with creditors through a structured dialogue platform for arrears clearance and debt resolution, supported by African Development Bank President Dr. Akinwumi Adesina and former Mozambique President Joachim Chissano as a high-level facilitator.

The IMF mission expressed appreciation for the constructive discussions and support from Zimbabwean authorities and stakeholders during the visit.