Year: 2025
Type: article
Abstract: Following the request for a Staff-Monitored Programme (SMP) by the authorities in 2023, an International Monetary Fund (IMF) staff team led by Mr. Wojciech Maliszewski conducted a mission to Harare from January 30th to February 13th, to advance discussions on the SMP. At the conclusion of the mission, Mr. Maliszewski said: “Zimbabwe's economic activity has started recovering after the El Niño-induced drought. Growth slowed from 5.3% to an estimated 2% in 2024, as the drought lowered agricultural output by 15%. This was compounded by reduced electricity production and declining prices for key mineral exports (platinum and lithium). That said, strong remittances continued supporting activity in domestic trade, services, and construction, and improved the current account surplus to an estimated US$500m (1.4% of GDP) in 2024. The ZiG willing-buyer willing-seller (WBWS) exchange rate was stable from the ZiG's introduction in April 2024 – with the ZiG month-on-month inflation averaging 2.3% – until September, when the currency weakened. Relative stability returned with the tightening of monetary policy since September, and the WBWS and parallel market exchange rates have stabilised, and the gap between these rates has narrowed. Meanwhile, fiscal pressures intensified – owing, in large part, to the transfer of the RBZ's quasi-fiscal operations to the Treasury. Strong revenue collection helped limit the 2024 budget deficit to an estimated 1% of GDP, but fiscal pressures resulted in an accumulation of domestic expenditure arrears, leading to the government implementing emergency spending cuts. Going forward, growth in 2025 is projected to increase to 6%, with the recovery in agriculture output due to better climate conditions and the projected improvement in terms-of-trade. See full article at: www.imf.org
Language: English
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4409211554