IMF Staff Reaches Staff-Level Agreement with Zimbabwe on the First Review under the Staff-Monitored Program

IMF News, July 7, 2026

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IMF staff and the Zimbabwean authorities reached a staff-level agreement on the first review under the 10-month Staff-Monitored Program approved in March 2026.
The agreement is subject to approval by IMF Management.
Press release date: July 7, 2026.
IMF mission visit: Washington, D.C.: An IMF team led by Mr. Wojciech Maliszewski visited Harare from June 9 to June 18, 2026, to conduct discussions for the first review.

Program implementation through end-March 2026 was broadly satisfactory.
All quantitative targets were met, including targets on:
- primary budget balance
- net official international reserves
- RBZ credit to the nonfinancial public sector
- new external non-concessional borrowing
- ZiG monetary base growth
Indicative targets: most were observed; one indicative target was missed — the indicative target on protected social and priority spending.
Structural benchmarks:
- The end-March structural benchmark on improving taxpayer register quality through quarterly monitoring and reporting of filing and payment compliance by new VAT and PAYE registrants was met.
- Authorities are making progress toward the end-June and end-September 2026 structural benchmarks.

Recent performance:
- Growth in 2025: 8.3 percent.
- Growth momentum continued in early 2026, supported by a rebound in agriculture, strong mining activity, and favorable gold prices.
Projections:
- Real GDP growth projected at about 5 percent in 2026.
- Inflation projected to average about 5.1 percent in 2026.
- Current account in 2026 is expected to remain in surplus, supported by mining and agricultural exports and remittance flows, contributing to a continued increase in gross international reserves.
- Growth expected to moderate to 4.2 percent in 2027 under the baseline.
Downside scenarios and risks:
- If the projected El Niño materializes, growth could moderate further to the 2–3 percent range.
- Additional downside risks from a stronger-than-expected El Niño and escalation of the Middle East war.
Monetary conditions:
- Inflation has remained low despite higher energy prices, reflecting tight monetary conditions and relative exchange rate stability.

Fiscal performance through March 2026 was stronger than expected, supported by robust revenue collection and conservative budget execution.
Authorities committed to:
- maintain spending within the approved 2026 national budget,
- save additional revenues to build buffers for potential food-security needs in 2027.
Staff recommendations and priorities:
- Maintain disciplined policy execution and protect social spending.
- Strengthen budget execution, commitment controls, public financial management, and domestic arrears clearance to prevent new arrears and safeguard fiscal credibility.
- Assess the continued relevance of gold delivery incentives in the 2027 national budget and limit payments in the current year to contain fiscal risks.

Reserve Bank of Zimbabwe (RBZ) policy:
- RBZ has maintained a tight monetary policy stance to contain inflation and reduce pressures in the foreign exchange market.
- This stance should continue until inflation expectations are firmly anchored and confidence in the local currency strengthens.
Market instruments and reforms:
- Staff welcomes the operationalization of the ZiG-denominated term deposit facility as part of a gradual shift toward more market-based instruments.
- Over time, reducing reliance on non-negotiable certificates of deposit would help strengthen monetary transmission and support domestic money market development.
- Authorities plan to develop a comprehensive strategy to further liberalize the foreign exchange market and reform the FX intervention framework; staff welcomes these plans.

Structural reforms remain essential to consolidate stabilization gains, strengthen public confidence, and support more inclusive growth.
Staff welcomes authorities’ commitment to strengthening social protection systems.
The missed indicative target on protected social and priority spending underscores the need to improve budget execution and ensure timely support to vulnerable groups.
Continued progress needed in public financial management, governance, and fiscal risk management to reinforce transparency, accountability, and confidence.

Resolving external arrears and restoring debt sustainability are central to Zimbabwe’s re-engagement agenda.
Staff welcomes efforts to advance discussions with external partners on a credible arrears-clearance and debt-resolution strategy.
Continued progress under the SMP, debt data reconciliation, and a clear strategy for creditor engagement are important to support the next stages of the re-engagement process.

The IMF mission team met with:
- Minister of Finance, Economic Development and Investment Promotion Hon. Professor Mthuli Ncube
- Governor of the Reserve Bank of Zimbabwe Dr. John Mushayavanhu
- senior government officials, representatives of the private sector, civil society, and development partners
The mission expressed appreciation to the Zimbabwean authorities for close cooperation and constructive discussions.

International Monetary Fund press release, July 7, 2026.