Zimbabwe’s economy is forecast to grow by 6.6% in 2025, outpacing many countries in Sub-Saharan Africa, according to the latest Zimbabwe Economic Update (ZEU) published on December 2, 2025. The report attributes this projected growth to robust performances in agriculture and services as well as ongoing investments in mining and steel.
Medium-term prospects remain positive, with economic growth anticipated at 5% for 2026. However, the ZEU warns that fiscal challenges, external shocks, and climate-related events such as droughts could threaten economic stability. The report notes that tight monetary policy since late 2024 has contributed to improved inflation dynamics and stabilization of the Zimbabwe Gold (ZiG) currency. As a result, inflation is expected to moderate to single digits in 2026 and decline further to around 5% over the medium term.
While poverty rates are expected to fall gradually as the economy recovers, the report highlights continued vulnerability among rural households due to reliance on rain-fed agriculture, slow job creation outside farming, and limited social protection programs.
Victor Steenbergen, Senior Country Economist for Zimbabwe, stated: “Now that the macroeconomy is improving, the Government’s position in re-prioritizing efforts to improve the ease of doing business to improve Zimbabwe’s private sector growth and competitiveness are more than necessary to enhance the overall growth and eventually translate economic growth into lasting economic benefits.”
The ZEU outlines several recommendations for sustaining economic momentum:
- Implementing policies from the Economic Reforms Matrix under the Structured Dialogue Platform (SDP) for arrears clearance and debt resolution. This is intended to maintain macroeconomic stability and promote investment by unlocking affordable external credit.
- Maintaining price and exchange rate stability to support job creation while preserving recent gains.
- Continuing reforms under the Presidential Ease of Doing Business Initiative aimed at improving regulatory conditions for private enterprise.
The special topic of this year’s ZEU focuses on regulatory burdens facing businesses across various sectors. The analysis found that some sub-sectors—particularly in agriculture, agro-processing, and tourism—face up to 28 different legal or regulatory requirements involving multiple ministries or agencies. Main findings include high compliance fees that can exceed annual revenues for certain firms; lack of transparency due to paper-based processes requiring physical office visits; and overlapping mandates resulting in redundant inspections without substantial public benefit.
The report acknowledges progress made through government-led reforms under the Presidential Ease of Doing Business initiative. Supported analytically by the World Bank Group, these efforts led to reductions or eliminations of certain levies and fees within beef, dairy, stockfeed, and tourism sectors after completion of an initial phase in September 2025.
To advance these reforms further, the ZEU recommends finalizing regulatory reviews for twelve priority sectors within a year. It also calls for a medium-term agenda centered on transparency—such as creating a public registry of licenses and inspection requirements—simplification through consolidating procedures tailored by firm size or risk profile; and improved governance via stronger oversight and clarification of agency mandates.
According to the report: “Effective implementation of these reforms—anchored on strong institutional leadership and improved administrative efficiency—can lower compliance costs, stimulate firm growth, and lay the foundation for a more competitive and inclusive economy.”