Source: ‘Mid-term budget review must consolidate economic stability’ – herald
Nqobile Bhebhe
Zimpapers Business Hub
EXPECTATIONS are high ahead of the 2025 Mid-Term Budget Review, which is widely expected to consolidate the prevailing economic stability while providing a clear roadmap for sustained growth during the second half of the year.
The review, set to be presented by Finance, Economic Development, and Investment Promotion Minister Professor Mthuli Ncube anytime soon, comes at a time when the economy is showing signs of durable stability and resilience, following the introduction of the Zimbabwe Gold (ZiG) currency in April last year.
Strong performance of the mining sector and rising investor confidence have also strengthened bullish sentiments among policy makers and analysts for the rest of the second half economic outlook.
This mid-year fiscal policy provides authorities the opportunity for recalibration, where need be, to reinforce key macroeconomic policy measures, correct imbalances, and respond to emerging domestic and global headwinds.
The Treasury is aiming to maintain the positive trajectory to achieve the targeted 6 percent expansion, following the El Niño-induced drought slowdown to 2 percent in 2024, when nearly 70 percent of agricultural produce was destroyed.
Agriculture is one of Zimbabwe’s main economic sectors, accounting for around 11,5 percent of the gross domestic product in 2023. The sector’s contribution shrank to 8,7 percent of GDP due to drought last year.
Key expectations include focus on policy consistency and fiscal discipline the Treasury pushes towards a strong rebound in growth this year.
This comes after the Zimbabwe National Statistics Agency (ZIMSTAT) recently revised the country’s GDP estimate for 2024 to US$44,7 billion, up from US$35,2 billion, following an economic census that factored in informal sector activity.
The development has highlighted the vast potential within the informal economy and the need for fiscal strategies to harness its value.
Reserve Bank of Zimbabwe (RBZ) Monetary Policy Committee member and economist Mr Persistence Gwanyanya said the mid-term review was critical to sustaining the momentum built since the introduction of the ZiG currency.
“We expect the Treasury to reinforce measures to sustain stability and economic resilience in the coming mid-term fiscal policy review,” said Mr Gwanyanya.
“Tight monetary policy stance has mainly been stable after the introduction of ZiG and sustaining this requires complementary fiscal policies,” he added.
A central expectation from the review is a suite of measures to boost demand and confidence in the ZiG, with the Government, controlling over 70 percent of the economy, expected to lead the charge through statutory instruments, public procurement and tax measures.
“It’s comforting that authorities have so far enacted a law that compels payment of 50 percent of corporate taxes in ZiG. We expect more measures to increase the use of the local currency,” said Mr Gwanyanya.
“Government has the power to influence the usage of ZiG in the economy through its procurement processes and, as already highlighted, through duties, taxes, and other statutory fees,” he added.
The International Monetary Fund (IMF) recently acknowledged Zimbabwe’s progress in restoring macroeconomic stability, particularly following the launch of ZiG and urged authorities to sustain deep structural reforms to solidify resilience.
This comes amid relative stability of both the exchange rate and inflation, which has boosted market confidence and ushered in a more predictable environment, creating conducive conditions for business and economic growth.
The central bank has already presented evidence of a rapidly stabilising economy, revealing in its second quarter economic performance snapshot that local currency monthly inflation averaged 0,5 percent since February.
Economist Ms Alice Chikonzi said the IMF’s recognition presents a unique opportunity for Zimbabwe to consolidate credibility, attract investment and move closer to international re-engagement.
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