Zimbabwe is on course to reach a projected 6% economic growth in 2025, driven by strong agricultural performance and favorable global commodity prices, Finance Minister Mthuli Ncube said on Thursday.
Following a difficult 2024 marked by severe drought and currency instability that dragged GDP growth down to 2%, the economy has begun to show signs of recovery in the first half of this year.
“Given the positive economic developments during the period January to June, we are confident that the projected economic growth of 6% alluded to in the 2025 National Budget is achievable,” Ncube told parliament during a mid-year budget review.
See Also:
Zimbabwe’s Richest Man and World’s 10th Richest Team Up to Build Africa’s First AI Factory
He added, “All sectors of the economy are expected to record positive growth in 2025, mainly on account of a favourable agriculture season, improved electricity generation, stable exchange rate and inflation rate.”
According to Reuters, Ncube did not provide a new update on the budget deficit, which was forecast at 0.4% of GDP in 2025 in last November’s budget outlook.
Despite increased revenue collection compared to the same period last year, Zimbabwe’s fiscal position is still under pressure due to grain imports, drought relief spending, and the public sector wage bill. Analysts warn that without new fiscal measures, managing the deficit could remain a challenge.
The local currency, the ZiG, introduced in April 2024 to replace the Zimbabwe dollar, has remained largely stable against the U.S. dollar. However, U.S. dollars continue to dominate daily transactions in the country.
Ncube reaffirmed the government’s commitment to the gold-backed ZiG and credited its stability to tight monetary and fiscal discipline.
See Also:
Zimbabwe’s Informal Sector Now a Threat to the Economy
Image Credit: Bloomberg
