IMF Raises Alarm Over Zimbabwe’s Fiscal Risks Despite 6% Growth ForecastThe International Monetary Fund (IMF) has cautioned that Zimbabwe’s recent economic gains could be derailed by growing fiscal risks, mounting domestic arrears, and lingering structural weaknesses.
In its 2025 Article IV consultation report released Friday, the IMF projected Zimbabwe’s economy to grow by 6% this year, supported by stronger agricultural output, record gold prices, and steady remittance inflows. However, it warned that confidence in the local currency remains fragile and foreign reserve buffers are critically low.
The IMF board of directors highlighted “important challenges” including fiscal financing pressures, domestic arrears, limited access to official external funding, low reserves, weak domestic currency monetisation, a wide gap between official and parallel exchange rates, structural deficiencies, and governance vulnerabilities.
Nearly US$600 million in domestic arrears was accumulated in 2024, according to the report. The deficit was largely financed through Treasury bill issuance and direct borrowing from the Reserve Bank of Zimbabwe, fueling an expansion in domestic liquidity and a sharp depreciation of the local currency late last year.
To safeguard progress, the IMF urged Zimbabwe to strengthen its monetary and foreign exchange frameworks, improve public financial management, and accelerate governance and anti-money laundering reforms.
“Building on recent momentum is essential to addressing these challenges and achieving durable macroeconomic stability,” the report concluded.
Source:Africa Publicity
