• Cyclical, Not Structural Growth: The IMF’s projected 6.0% growth for 2025 is a temporary, commodity-driven rebound from a drought-induced slowdown, not a sign of sustainable reform
• Illusory Fiscal Surplus and Debt Reduction: The reported fiscal surplus (4.4% by 2026) and declining debt-to-GDP ratio (41.6% in 2026) are statistical mirages, driven by unpaid domestic arrears and currency rebasing
• Fragile Monetary and External Stability: Despite a tight monetary policy and current-account surplus, Zimbabwe’s low broad-money-to-GDP ratio and critically low reserves leave the economy vulnerable to currency instability and external shocks

Harare- The International Monetary Fund’s (IMF) latest economic projections for Zimbabwe, as outlined in its October 2025 Regional Economic Outlook for Sub-Saharan Africa, paint an ostensibly bright picture for 2025 and 2026. The data suggests a robust V-shaped recovery, with high growth, declining debt, and a sustained budget surplus, signalling a newfound stability.

At first glance, the numbers are impressive: a 6.0% growth rate in 2025, a dramatic drop in inflation from 736.1% in 2024 to 89% in 2025, and a fiscal surplus projected to widen to 4.4% by 2026.

However, these headline figures mask a far more precarious reality. A deeper interrogation reveals that Zimbabwe’s apparent economic turnaround is built on statistical adjustments, temporary commodity windfalls, and mounting hidden liabilities, rather than structural reforms or sustainable policies.

Growth: A Cyclical Bounce, Not a Structural Breakthrough

The IMF’s projection of 6.0% growth in 2025, followed by a decline to 4.6% in 2026, is presented as evidence of robust economic expansion. However, this growth is not the result of deep-rooted reforms but rather a cyclical rebound from the drought-induced 1.7% slowdown in 2024. The 2025 figure represents the peak of a weather-dependent, commodity driven boom, heavily reliant on volatile sectors like mining and agriculture. The projected deceleration to 4.6% in 2026 slightly above the Sub-Saharan Africa (SSA) average reflects the absence of a platform for sustained, long-term expansion.

For an economy emerging from a low base, double-digit growth would be more indicative of a transformative recovery. Persistent monetary and fiscal instability continues to erode investor confidence, constraining private sector investment and ensuring that growth will likely revert to a lower, more vulnerable trajectory in the absence of structural reforms.

Inflation: A Catastrophic Average Masked by Optimism

The IMF’s narrative of a sharp decline in inflation from 736.1% in 2024 to 89% in 2025, and further to 18.2% in 2026, is framed as a triumph of monetary policy. Yet, the 89% average inflation rate for 2025 remains catastrophic, implying a near-doubling of the cost of living and serving as a stark reminder of Zimbabwe’s recent hyperinflationary crisis.

The projected drop to 18.2% in 2026, while an improvement, still significantly exceeds the SSA average of 10.9%, imposing a 7.3 percentage point “volatility tax” on businesses and citizens.

This premium reflects persistent fears of renewed monetary financing, an unstable exchange rate for the Zimbabwe Gold (ZiG) currency, and the government’s low credibility. Far from signalling monetary success, these figures highlight an economy still grappling with the legacy of fiscal mismanagement and a fragile currency.

Fiscal Balance: A Paper Surplus Built on Unpaid Bills

The IMF’s portrayal of Zimbabwe’s fiscal management as exceptional projecting a shift from a deficit in 2024 to a 3.1% surplus in 2025 and a 4.4% surplus in 2026 is misleading. This “surplus” is not a product of prudent fiscal policy but rather a deceptive accounting manoeuvre.

The IMF’s cash-based accounting fails to capture the government’s practice of accumulating domestic expenditure arrears by delaying payments to suppliers and contractors. By deferring these obligations, the government artificially lowers expenditure, creating a paper surplus while effectively forcing credit from businesses.

This practice crowds out the private sector, strangling local enterprises with unpaid bills that function as a hidden, short-term domestic debt. A genuine surplus would require timely payments, transparent reporting, and structural spending reforms, none of which are evident in Zimbabwe’s current fiscal strategy.

Government Debt: A Statistical Illusion, Not a Declining Burden

The IMF’s claim that Zimbabwe’s debt-to-GDP ratio will fall sharply from 73% in 2024 to 41.6% in 2026 suggests a rapidly declining debt burden. However, this reduction is largely a statistical sleight of hand, driven by high nominal GDP growth (inflated by currency rebasing and high inflation) and stock-flow adjustments following the introduction of the ZiG. In reality, Zimbabwe remains in debt distress, with multi-billion-dollar arrears to the IMF, World Bank, and African Development Bank (AfDB).

The country is locked out of concessional financing, and without a credible arrears-clearance strategy, these ratios are little more than cosmetic. A shrinking percentage does not equate to a shrinking burden; Zimbabwe’s debt remains a significant obstacle to economic stability.

Broad Money: A Fragile Monetary Anchor

The IMF highlights Zimbabwe’s tight monetary stance, with broad money supply remaining below 10% of GDP, in stark contrast to the SSA norm of over 35%. While this may appear to reflect discipline, it is more indicative of a suffocating monetary environment.

Zimbabwe’s heavily dollarised economy means much of its liquidity circulates outside the Reserve Bank’s control, and the low broad-money-to-GDP ratio reflects a contracted local-currency base rather than genuine stability.

While caution is necessary to rebuild confidence in the ZiG, an excessively tight monetary base risks choking private-sector credit and stalling recovery. Any fiscal or monetary misstep could trigger a flight back to the US dollar, undermining the fragile monetary anchor and reigniting instability.

Current Account: A Temporary Lifeline, Not a Safety Net

The IMF’s projection of a sustained current-account surplus, driven by gold, tobacco, and platinum exports, as well as resilient diaspora remittances, is one area of genuine strength.

However, these surplus masks a critical vulnerability: Zimbabwe’s gross reserves remain dangerously low, currently below one month of import cover, far short of the standard three-month benchmark. Without adequate reserves, the country lacks the buffer to defend the ZiG or absorb external shocks.

The current-account surplus is thus a temporary lifeline, heavily reliant on volatile commodity prices and remittance flows. A global commodity slump could push Zimbabwe back into instability, highlighting the fragility of its external position.

The Verdict: Stability Remains Elusive

The IMF’s 2025–2026 projections for Zimbabwe are a masterclass in statistical optimism, offering comforting headlines that obscure fundamental fragilities. The “surplus” is built on unpaid arrears, the “low debt” is a product of accounting tricks, and the “low inflation” still carries a punishing volatility tax.

Zimbabwe’s economy is not on a stable growth path but is merely recovering from an abnormally low base, powered by external factors like favourable commodity prices and remittances rather than internal reform momentum.

Unless Zimbabwe decisively addresses its debt arrears, restores monetary credibility, and eliminates the practice of financing deficits through arrears and ad-hoc money creation, the 4.6% growth forecast for 2026 will mark the peak of a fragile cycle, not the foundation of a sustained recovery.

True stability will require credible, transparent, and disciplined economic governance qualities that remain conspicuously absent.

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