Zimbabwe’s economy is projected to grow by 6% in 2025, rebounding from a challenging year in 2024 marked by drought and currency instability

ByQncNews4 months Ago1 Mins read264

Zimbabwe’s economy is projected to grow by 6% in 2025, rebounding from a challenging 2024 marked by a severe drought and currency instability. Finance Minister Mthuli Ncube highlighted that the anticipated growth is driven by strong agricultural performance, stable commodity prices, enhanced electricity generation, and a stable exchange and inflation rate.

In 2024, the economy faced significant setbacks due to an El Niño-induced drought, which led to widespread crop failures and a 72% reduction in maize production. This resulted in a downward revision of the growth forecast to 2%, down from the previously projected 3.5%.

The mining sector also experienced challenges, with declines in lithium and platinum prices affecting output. However, the government remains optimistic about a recovery, with mining growth projected to rise to 5.6% in 2025, up from 2.3% in 2024.

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To stabilize the economy, the Reserve Bank of Zimbabwe introduced the Zimbabwe Gold (ZiG) currency in April 2024, replacing the Zimbabwe dollar. The ZiG is backed by gold reserves and has remained relatively stable against the U.S. dollar since its launch. Despite this, the U.S. dollar continues to be widely used in daily transactions.

The government is committed to fiscal consolidation, targeting a budget deficit of less than 3% of GDP by refocusing expenditure on key assets that support economic growth. This includes investments in agriculture, electricity, ICT, and mining sectors, which are expected to be the main drivers of growth in 2025.

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While the outlook is positive, challenges remain, including managing the budget deficit and ensuring the stability of the ZiG currency. Analysts emphasize the need for continued fiscal discipline and structural reforms to sustain the projected growth trajectory.

In summary, Zimbabwe is on a path to economic recovery, with projections indicating a 6% growth in 2025. This rebound is supported by favorable agricultural conditions, stable commodity prices, and strategic government initiatives aimed at fostering growth and stability.