The International Monetary Fund has approved the completion of the second review under Zimbabwe’s 10-month Staff-Monitored Programme.
In a statement, IMF Management said the approval reflects continued progress in consolidating macroeconomic stability and strengthening Zimbabwe’s track record of policy implementation in support of arrears clearance, debt resolution and re-engagement with the international community.
The Fund said 2026 marked a turning point for the economy. Economic activity continued to expand in the first half of the year, while annual ZiG inflation remained in low single digits at 3.7% in September.
It noted that the exchange rate was broadly stable and the external position benefited from strong mineral exports, favourable commodity prices and resilient remittance inflows. Fiscal revenue exceeded expectations, contributing to a stronger-than-programmed primary balance.
The outlook for 2026 remains favourable. The IMF projects real GDP growth of 5%, with inflation expected to stay in single digits and the current account remaining in surplus. Growth is expected to slow to 3.5% in 2027, reflecting the anticipated effects of an El Niño-related drought on agricultural production, before recovering in 2028. Risks remain tilted to the downside, particularly from a more severe drought and renewed commodity and energy price pressures.
The Fund said programme implementation through end-June was strong. All quantitative targets, structural benchmarks and continuous commitments for end-June were met. All indicative targets were met except the floor on protected social and priority spending, reflecting persistent implementation bottlenecks affecting key programmes.
On fiscal policy, the IMF said stronger-than-expected revenue provides an opportunity to build buffers and prepare for potential food security and energy pressures. It said the 2027 Budget should be anchored in prudent revenue and financing assumptions to avoid creating a structural fiscal deficit, while providing adequate space for priority social spending and high-impact development expenditure.
The Fund said stronger expenditure controls, cash planning, public financial management and transparent liability management will be central to improving budget credibility, preventing new arrears and turning favourable revenue performance into durable fiscal gains.
It said timely execution of protected social and priority spending remains essential. It welcomed the authorities’ adoption of a programme-by-programme financing and execution plan for the remainder of the SMP, saying effective implementation will be important to address bottlenecks, improve execution of priority programmes and ensure that stabilisation delivers tangible benefits to vulnerable groups.
The Reserve Bank of Zimbabwe has maintained an appropriately tight monetary policy stance, which the IMF said has supported low inflation and exchange rate stability. It said the stance should be maintained while the authorities continue strengthening liquidity management and developing market-based monetary instruments.
The Fund welcomed progress towards introducing a more transparent foreign exchange trading platform and preparing a comprehensive strategy for a gradual and properly sequenced transition towards a more market-based foreign exchange system.
The IMF said governance reforms and stronger oversight of Mutapa and other state-owned enterprises will remain important to contain fiscal risks and sustain confidence. It called for continued adherence to borrowing controls for Mutapa and its subsidiaries, publication of audited financial statements, and more systematic monitoring and disclosure of the financial health of state-owned enterprises to help limit the build-up of direct and contingent liabilities.
The IMF said the SMP is helping to strengthen Zimbabwe’s track record and support its broader re-engagement agenda. It added that continued implementation of the remaining programme commitments, together with further progress in reconciling debt data and developing a credible and fully financed approach to arrears clearance and debt resolution, will help build momentum in discussions with creditors and development partners.
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