The International Monetary Fund has reached a staff-level agreement with the Government of Zimbabwe on the first review of its ten-month Staff-Monitored Programme (SMP), marking a significant step in the country’s efforts to clear arrears and re-engage with international creditors.
A Staff-Monitored Programme is an informal, non-financing arrangement between the IMF and a member country. Successful implementation of SMP targets typically serves as a first step towards a more formal IMF financial assistance programme and, crucially, helps pave the way for debt restructuring and the clearance of arrears with other international financial institutions.
An IMF mission led by economist Wojciech Maliszewski visited Harare between 9 and 18 June for discussions with Zimbabwean authorities. The agreement, which remains subject to approval by the IMF’s Executive Board, comes as the country’s economy demonstrates resilience despite an adverse international environment, including ongoing conflict in the Middle East.
Programme implementation through end-March was assessed as ‘broadly satisfactory’, with all quantitative targets met. These included benchmarks on the primary fiscal balance, net international reserves, Reserve Bank of Zimbabwe credit to the non-financial public sector, new non-concessional external borrowing, and growth of the monetary base of the ZiG, the local currency.
However, the IMF noted that an indicative target on protected and priority social spending was not met, highlighting the need to improve budget execution and ensure timely support to the most vulnerable groups.
Zimbabwe’s economy grew by 8.3% in 2025 and maintained robust momentum into early 2026, driven by an agricultural recovery, strong mining activity, and favourable gold prices. Real GDP growth is projected at approximately 5% in 2026, moderating to 4.2% in 2027 under the baseline scenario.
Inflation has remained subdued and is expected to reach around 5.1% in 2026, despite higher energy prices, reflecting tight monetary conditions and relative exchange rate stability. The current account is also projected to remain in surplus, supported by mining and agricultural exports alongside remittance inflows.
The IMF nonetheless flagged the persistence of downside risks, including the potential impact of an El Niño weather event, which could reduce growth to a range of 2% to 3%, as well as a possible escalation of the conflict in the Middle East.
Fiscal performance through March exceeded expectations, underpinned by robust revenue collection and prudent budget execution. The Fund welcomed the authorities’ commitment to keep expenditure within the limits of the approved 2026 state budget, while channelling additional revenues into reserves to address potential food security needs in 2027.
Source: Diário Económico
