Zimbabwe is poised for a significant economic turnaround in 2025, driven by improved agricultural performance following a devastating El Niño-induced drought. Finance Minister Mthuli Ncube announced a forecasted GDP growth of 6%, a notable recovery from this year’s modest 2% growth. In a recent budget presentation, Ncube highlighted the country’s strong growth potential, projecting Zimbabwe to rank among the fastest-growing economies in the region.
Agriculture and mining, the backbone of Zimbabwe’s economy, are expected to expand by 12.8% and 5.6%, respectively, in 2025. Improved rainfall linked to the La Niña phenomenon has already started benefiting the farming sector, with wheat and dairy industries outperforming earlier projections. The mining sector’s growth will largely stem from higher production of gold and platinum group metals, supported by favorable global commodity prices due to geopolitical tensions and increased clean-energy investments.
Despite the positive outlook, Zimbabwe continues to grapple with economic challenges, including power shortages, high borrowing costs, and public skepticism about the local currency, the Zimbabwe dollar (ZiG), which has faced significant devaluation. In response, the government plans to enforce fiscal discipline and expand its tax base, requiring businesses across various sectors to register with tax authorities starting January 2025.
Inflation management remains a priority, with Ncube projecting local currency inflation to average below 3% monthly next year. Tight monetary and fiscal policies aim to stabilize the economy while addressing speculative behaviors undermining public confidence.
The government has also committed to expenditure cuts while maintaining a $7.7 billion spending target for 2025, funded by anticipated revenues of $7.5 billion. This marks a cautious approach toward achieving economic stability while fostering growth.
The developments underscore Zimbabwe’s efforts to rebound from years of economic mismanagement, paving the way for sustainable growth supported by key sectors and improved weather conditions.