Zimbabwe’s economy could be recovering faster than many investors realise, with global banking giant Citigroup pointing to signs of a potentially significant economic turnaround after years of instability.
In a recent assessment, Citi said Zimbabwe was breaking with its history of high inflation, currency instability and monetary financing, although the country’s troubled economic reputation could still discourage investors from recognising the changes underway.
“Where perceptions and reality may now be increasingly out of kilter is the speed with which an economic turnaround has started to play out in Zimbabwe since 2025,” Citi chief Africa economist David Cowan wrote in a client note.
The bank expects annual inflation, which averaged about 736% in 2024, to fall to 8% this year. It also projects the cash fiscal deficit to move into balance after reaching 6.7% of gross domestic product in 2023.
“Fiscal issues have long been at the heart of the country’s poor macroeconomic performance,” Cowan said, noting that Zimbabwe experienced economic contractions in six of the 20 years between 2005 and 2024.
Citi attributed the improving outlook to elevated international gold prices, the expansion of the lithium sector, the introduction of the gold-backed ZiG currency in 2024 and the government’s decision to stop printing money to finance the budget.
The 10-month staff-monitored programme with the International Monetary Fund, approved in April, has also strengthened the reform process.
However, Citi warned that Zimbabwe’s debt remains unsustainable and “in distress”, while continued dollarisation an
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