The International Monetary Fund (IMF) and Zimbabwe have reached a staff-level agreement on the second review of the country’s 10-month Staff-Monitored Program.
This marks another step in Harare’s efforts to stabilize the economy, clear external arrears and re-engage with international creditors.
The agreement, reached after an IMF mission visited Harare from September 7 to 17, remains subject to approval by IMF management.
It will not be considered by the IMF’s Executive Board, as the monitored program is designed to assess policy implementation and help build a track record rather than provide a new financing arrangement.
Completion of the review would strengthen Zimbabwe’s case as it works toward arrearsclearance, debt restructuring and renewed engagement with the international financial
community.
According to Wojciech Maliszewski, who led the IMF mission while said “Program implementation through end-June 2026 was strong,” in a statement.
Zimbabwe met all quantitative and indicative targets except the target for
protected social and priority spending. Both end-June structural benchmarks were also met.
The missed social-spending target is a significant weakness in an otherwise positive assessment.
The IMF said the shortfall highlighted shortcomings in cash planning and budget execution, with a risk that approved funds may not reach priority programs and vulnerable households on time.
Zimbabwean authorities have committed to addressing those implementation bottlenecks and improving monitoring of social expenditure.
Growth remains strong, but risks are rising
The IMF said Zimbabwe’s economy expanded by 8.3 percent in 2025 and is projected to grow by 5 percent in 2026.
Annual inflation fell to 2.9 percent in August, a low single-digit rate that the fund attributed to tight monetary conditions and relative stability in the
exchange rate.
The country’s current account is also expected to remain in surplus this year, supported by strong export receipts and remittance inflows.
Growth is forecast to slow to 3.5 percent in 2027, however, as Zimbabwe faces the anticipated effects of a super El Niño event.
The projection incorporates mitigation
measures planned by the government, but the IMF warned that the outlook could deteriorate if the weather event proves more severe than expected or if those measures are delayed or ineffective.
Inflation is expected to remain in single digits next year, while the current account is projected to stay in surplus.
Pressure to build fiscal buffers Fiscal performance through June was stronger than expected, largely because of robust revenue collection.
The IMF said the improvement gives the government an opportunity to build fiscal buffers while keeping expenditure within the approved budget.
It urged continued progress on expenditure controls, cash planning, public financial management and the management of domestic arrears.
Those measures, the fund said, will
be important to preserve fiscal credibility and prevent stronger revenues from being undermined by spending pressures or the accumulation of new unpaid obligations.
Zimbabwe has also advanced reforms intended to bring U.S.-dollar payments more fully into the public financial management system and strengthen commitment controls and expenditure monitoring.
The completion of a framework for liability-management operations was described as an important step toward more transparent and bettergoverned debt operations aligned with the country’s medium-term debt strategy.
Monetary and foreign-exchange reforms continue
The Reserve Bank of Zimbabwe has maintained a tight monetary policy stance, helping to contain inflation and reduce pressure in the foreign-exchange market.
The IMF said that approach should continue until inflation expectations are firmly anchored and confidence in the Zimbabwe Gold, or ZiG, currency improves.
The central bank has made progress on an electronic foreign-exchange trading platform, which the IMF said could support more transparent and market- based currency trading.
Authorities are also developing a broader strategy to liberalize the foreign- exchange market, improve monetary- policy operations and reform the framework governing foreignexchange interventions.
The reforms come as Zimbabwe seeks to strengthen confidence in its monetary regime after years of currency instability and multiple attempts to restore a functioning domestic currency.
The IMF’s statement did not set out a timetable for the next stages of those
reforms, but it emphasized the need for disciplined implementation.
Governance remains central to re-engagement
The IMF also highlighted progress on governance and fiscal transparency. Zimbabwe is preparing second National Anti-Corruption Strategy.
While the publication of the Mutapa Investment Fund’s financial statements—and steps toward publishing the statements of companies in its portfolio—was cited as progress in improving oversight of public assets and fiscal risks.
The fund said effective implementation of the anti-corruption strategy and continued improvements in financial reporting would be necessary to strengthen accountability and public confidence.
Resolving the country’s external arrears and restoring debt sustainability remain at the heart of Zimbabwe’s re-engagement agenda.
The IMF said continued strong performance under the monitored program, progress in reconciling debt data and sustained discussions with creditors would be essential to advance the arrears-clearance and debt-resolution process.
The mission held discussions with Finance Minister Mthuli Ncube, Finance Ministry Permanent Secretary George Guvamatanga, Reserve Bank Governor John Mushayavanhu, govt officials, private-sector representatives, civil society organizations and development partners.
For Harare, the agreement offers evidence that its reform program is broadly on track.
But the IMF’s warning over social spending, along with the risks posed by weather shocks, fiscal slippage and incomplete currency reforms, underscores that the path to debt relief
and international re-engagement remains conditional on sustained policy execution.
