The International Monetary Fund (IMF) has warned that Zimbabwe’s recent economic stabilisation gains risk being undermined by intensifying fiscal pressures, mounting domestic arrears and persistent structural vulnerabilities.
In its 2025 Article IV consultation report released Friday, the IMF noted that while Zimbabwe’s economy is projected to rebound to six percent growth this year – driven by improved agricultural output, record-high gold prices and sustained remittance inflows – confidence in the local currency remained weak and foreign reserve buffers dangerously low.
The IMF urged the Harare authorities to implement urgent reforms to safeguard macroeconomic progress.
It said the IMF board of directors noted “that important challenges remain from fiscal financing pressures and the accumulation of domestic arrears, limited access to official external financing, low reserve buffers, low domestic currency monetisation, a persistent gap between the official and parallel exchange rates, structural gaps, and governance vulnerabilities.”
“They recommended building on recent momentum to implement reforms to address these challenges and help achieve long‑lasting macroeconomic stability,” the report said.
The report noted that fiscal financing constraints have deepened, with nearly US$600 million in domestic arrears accumulated in 2024.
The deficit was financed through Treasury bill issuance and direct borrowing from the Reserve Bank of Zimbabwe, contributing to a sharp expansion in domestic liquidity and a steep depreciation of the local currency in late 2024.
The IMF also urged reforms to enhance the monetary and foreign exchange frameworks, improve public financial management and accelerate governance and anti-money laundering reforms.
JN/APA