- Zimbabwe Clears First IMF Programme Review as Growth Holds at 8.30%
Zimbabwe has completed the first review of its 10-month Staff-Monitored Program with the International Monetary Fund after meeting all quantitative targets and structural benchmarks, strengthening the country’s attempt to rebuild policy credibility and re-engage with international creditors.
IMF management approved the review after assessing implementation through the end of March 2026 as strong. The programme is intended to help the authorities establish a record of disciplined economic management that could support negotiations on debt restructuring, arrears clearance and renewed access to international financial support.
Unlike a conventional IMF lending arrangement, the Staff-Monitored Program does not provide financing and is not endorsed by the Fund’s Executive Board. It is an informal agreement under which IMF staff assess the implementation of an economic programme designed by the national authorities.
Completion of the review therefore carries no direct disbursement. Its importance lies instead in the signal it sends to creditors and development partners about Zimbabwe’s willingness and capacity to implement agreed fiscal, monetary and governance reforms.
Zimbabwe’s economy expanded by 8.30% in 2025 and continued to record strong activity in early 2026, supported by improved agricultural production, robust mining output and favourable international gold prices.
The IMF expects growth to moderate to 5.00% in 2026 before averaging about 4.20% over the medium term. Inflation is projected to remain in single digits, provided the authorities maintain tight monetary and fiscal policies.
The current-account balance is also expected to remain in surplus, although the margin is forecast to narrow as import demand strengthens and external conditions become less supportive.
The outlook remains exposed to significant downside risks. The Fund identified the possibility of a major El Niño weather event and renewed conflict in the Middle East as threats that could weaken agricultural output, raise import costs and disrupt economic activity.
Zimbabwe met all end-March quantitative targets under the programme. These included benchmarks covering the primary budget balance, net international reserves, Reserve Bank of Zimbabwe lending to the non-financial public sector, external borrowing and the growth of the monetary base.
Most indicative targets were also observed. However, the government missed the target covering protected social and priority expenditure, highlighting the continuing difficulty of translating stronger fiscal performance into timely support for vulnerable households.
The Fund said the shortfall reinforced the need for improved budget execution and stronger systems to ensure that allocations for social protection, health, education and other priority programmes were released as planned.
Zimbabwe’s fiscal primary balance was stronger than expected during the first quarter, supported by robust revenue collection.
Under the programme, the government has committed to keeping expenditure within the limits of the approved 2026 national budget and saving additional revenues to build buffers against possible food-security pressures in 2027.
That approach reflects concerns that a weather-related decline in agricultural production could increase the need for food imports and emergency social support.
The IMF also called for stronger management of fiscal risks arising from gold-delivery incentives, liability-management operations and the clearance of domestic arrears.
Gold plays a central role in Zimbabwe’s export economy and foreign-exchange earnings, but incentive schemes designed to encourage deliveries to official channels can create financial obligations that are not always fully reflected in the budget.
The programme supports a rules-based approach to early debt redemptions and other liability-management transactions, alongside stronger safeguards to ensure that the clearance of existing domestic arrears does not generate new unpaid obligations.
Improving commitment controls, public financial management and budget execution will be essential to preserving fiscal credibility, the Fund said.
The Reserve Bank of Zimbabwe has maintained a restrictive monetary stance to control inflation and reduce pressure in the foreign-exchange market.
The IMF said that position should continue until inflation expectations are firmly anchored and confidence in Zimbabwe Gold, the country’s local currency commonly known as ZiG, strengthens.
It welcomed the introduction of a ZiG-denominated term-deposit facility as part of a gradual shift towards more market-based monetary-policy instruments.
Over time, the Fund said the central bank should reduce its reliance on non-negotiable certificates of deposit, which can limit the development of a more active domestic money market and weaken the transmission of monetary policy through market interest rates.
The authorities are also preparing a strategy to liberalise the foreign-exchange market further and reform the central bank’s intervention framework.
Zimbabwe has struggled for years with multiple exchange rates, limited confidence in domestic currency and a high degree of dollarisation. Progress towards a more transparent and market-driven foreign-exchange regime will therefore be central to the durability of the current stabilisation effort.
Structural reforms remain another important part of the programme.
The IMF called for continued progress in governance, fiscal-risk management, public financial management and social protection. These reforms are intended to improve transparency and accountability while strengthening confidence among domestic businesses and international partners.
Zimbabwe’s external debt and arrears remain major obstacles to normal relations with multilateral lenders and international capital markets.
The Staff-Monitored Program is designed partly to demonstrate that the authorities can maintain policy discipline while they reconcile debt records and develop a credible strategy for resolving arrears.
Successful completion of subsequent reviews could strengthen the government’s position in discussions with creditors, but it would not automatically lead to debt relief or new IMF financing.
The programme’s credibility will depend on whether the authorities sustain tight policies while protecting essential public services and avoiding the accumulation of fresh arrears.
Zimbabwe’s strong growth and low inflation provide a favourable starting point. But the missed social-spending target, continuing currency uncertainty and exposure to weather and geopolitical shocks show that the stabilisation process remains fragile.
The first review marks progress in Zimbabwe’s re-engagement campaign. The more difficult test will be whether the government can convert compliance under an informal IMF monitoring arrangement into durable institutional reform, debt resolution and broader economic confidence.
