Economy maintains positive growth trajectory

Farirai Machivenyika

Senior Reporter

ZIMBABWE’S economy grew by 4,6 percent in the first half of 2026, keeping its 5 percent annual growth target within reach, as increased foreign currency inflows and price stability supported the trajectory.

The performance follows an 8,3 percent expansion last year, up from 1,7 percent in 2024, with agriculture and mining among the key drivers of the recovery, agriculture making a double contribution of recovery from a bad drought year along with normal expected growth.

Presenting the Ministry of Finance’s expectations for the 2027 National Budget to the Parliamentary Portfolio Committee on Budget, Finance and Investment Promotion on Monday, the Ministry’s Chief Director for Economic Affairs, Mr Joseph Mverecha, said the economy had maintained positive growth despite a challenging global environment.

“The economy grew by 8,3 percent in 2025, up from 1,7 percent in 2024. The 8,3 percent was among the strongest in the region.

“This year, the economy grew by 6,5 percent in the first quarter and 3,1 percent in the second quarter, averaging 4,6 percent for the first half of the year. This keeps the full-year target forecast of five percent within reach,” he said.

The latest figures build on the economic recovery reported last year, which was supported by improved agricultural production following the 2024 drought, strong mining performance and favourable international gold prices.

In the first half of the year, the economy recorded a significant growth in foreign currency inflows, which rose by 47,8 percent to US$10,72 billion compared with US$7,25 billion during the same period last year.

Export proceeds increased to US$7,53 billion, while diaspora remittances and foreign direct investment also recorded growth, providing additional foreign currency beyond the major positive trade balance to support economic activity.

The growth in export earnings highlights the importance of productive sectors, particularly mining and agriculture, in generating foreign currency and supporting the country’s external position.

However, the economy’s performance remains exposed to fluctuations in international commodity prices, geopolitical developments and climate-related shocks that could affect production and exports.

On price stability, Mr Mverecha said ZiG inflation had averaged 0,4 percent over the first nine months of the year, reflecting a sustained period of relative stability.

He added that revenue collections stood at ZiG 191 billion by August this year against an annual target of ZiG 288 billion.

In the eight months, revenue growth reached 38 percent against 18 percent.

Mr Mverecha attributed the growth to the measures incorporated into legislation to improve tax administration with the revenue-to-GDP ratio expected to surpass the 2026 target of 15,9 percent to achieve 17,5 percent by year-end.

“The financial sector remained safe and sound, playing its intermediary role and strengthened through enabling legislative and regulatory frameworks.

“The enactment of the Insurance and Pensions Commission Amendment Act in April 2026 extended the prudential supervision mandate to include NSSA and medical aid, aligning with global best practice as well as ensuring an equitable and sustainable health care system that prioritises patient needs over profits,” he said.

The increase in revenue collections would strengthen the Government’s capacity to finance public programmes and infrastructure development.

The reforms, which have been implemented by the Government are intended to strengthen oversight and align the country’s regulatory framework with international best practice, while supporting a more equitable and sustainable healthcare system that prioritises patients’ needs.

The positive economic outlook comes as the Government begins preparations for the 2027 National Budget, which is expected to address the need to sustain growth while strengthening the economy’s resilience to external shocks.

Against this background, consultations for the upcoming fiscal policy statement are expected to focus on building resilience against climate-related risks, international oil price shocks and geopolitical tensions, with proposed priorities including irrigation development, dam construction and grain reserves.

These interventions are particularly important given the risks posed by El Niño-induced drought, which could lower agricultural output, increase food insecurity and place pressure on prices.

The International Monetary Fund has projected Zimbabwe’s economy to grow by five percent this year, but expects growth to moderate to 3,5 percent next year, partly reflecting the anticipated impact of adverse weather conditions.

Source: Economy maintains positive growth trajectory – herald

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