Zimbabwe: Economic and Political Overview
Zimbabwe is a lower-middle-income country with strong human and natural capital, offering significant growth potential. With a highly educated workforce, abundant resources, and recent economic and institutional reforms, Zimbabwe could achieve rapid growth and reach upper-middle-income status by 2030, as targeted by the Government of Zimbabwe (GoZ). However, macroeconomic instability and fiscal pressures have historically hindered progress. The country’s economy is recovering after the El Niño-induced drought, with growth slowing from 5.3% to an estimated 2% in 2024. The drought reduced agricultural output by 15%, while lower electricity production and falling prices for key minerals (platinum and lithium) further impacted growth. However, strong remittances helped support domestic trade, services, and construction, boosting the current account surplus to an estimated USD 500 million (1.4% of GDP) in 2024. Growth in 2025 is projected to rise to 6%, driven by a recovery in agricultural output due to improved climate conditions and a forecasted improvement in terms of trade (IMF).
Concerning public finances, fiscal pressures worsened, largely due to the transfer of the RBZ’s quasi-fiscal operations to the Treasury. Although strong revenue collection kept the 2024 budget deficit to an estimated 1% of GDP, these pressures led to a buildup of domestic expenditure arrears, prompting the government to introduce emergency spending cuts. The ZiG WBWS exchange rate remained stable from its launch in April 2024, with month-on-month inflation averaging 2.3%, until weakening in September. Monetary tightening since then helped restore stability, with both the WBWS and parallel market rates stabilising and the gap between them narrowing. According to the World Bank, public debt remains high, unsustainable, and in distress, restricting access to international financing. With growing external arrears and legacy debts, total public debt reached USD 21.2 billion in 2023 (96.6% of GDP). In April 2024, the RBZ launched the ZiG currency, initially stabilising the exchange rate and keeping inflation in single digits through August. Tight monetary policy from October helped improve inflation dynamics, with ZiG inflation projected to fall from 736% in 2024 to 84% in 2025, and 8% over the medium term. Despite progress, Zimbabwe remains heavily dollarised, with foreign currency accounts making up 83% of broad money in December 2024. USD inflation is expected to stay in single digits in 2025, further improving the weighted USD-ZiG inflation rate. The parallel market premium has also narrowed, easing currency pressures.
Unemployment rate estimates stood at 21.8% as of Q3/2023, according to ZimStat, the country's national statistics agency. Due to low GDP growth in 2024, the poverty rate at the USD 2.15/day (PPP) international line declined only slightly to 37.7% (World Bank). The agricultural downturn from drought likely hit rural and farming households the hardest. Poverty is expected to decline in 2025 with stronger growth, though global uncertainties pose risks. Weak 2024 growth and low poverty reduction elasticity slowed progress. Despite strong human capital, job creation remains limited and informality high. The El Niño drought exposed poor households' climate vulnerability, highlighting the need for broader, targeted social protection. Lastly, the country was estimated to have a GDP per capita (PPP) of USD 5,075 in 2024, among the lowest in the world (IMF).
| Main Indicators | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) | 2027 (E) |
| GDP (billions USD) | 35.23 | 35.92 | 36.93 | 37.19 | 38.06 |
| GDP (Constant Prices, Annual % Change) | 5.3 | 2.0 | 6.0 | 4.5 | 3.5 |
| GDP per Capita (USD) | 2,119 | 2,114 | 2,127 | 2,098 | 2,102 |
| General Government Gross Debt (in % of GDP) | 96.7 | 70.3 | 58.0 | 55.4 | 53.1 |
| Inflation Rate (%) | 667.4 | 635.3 | 23.6 | 8.0 | 5.8 |
| Current Account (billions USD) | 0.14 | -0.11 | 0.14 | 0.27 | 0.29 |
| Current Account (in % of GDP) | 0.4 | -0.3 | 0.4 | 0.7 | 0.8 |
Source: IMF – World Economic Outlook Database, October 2021
Zimbabwe has abundant natural resources, including diamonds, gold, coal, iron ore, nickel, copper, lithium, tin, and platinum. Diamond, gold, and platinum have been the most economically significant natural resources produced in Zimbabwe. Even though the country is rich in resources, only around 10.3% of the land is arable. Overall, agriculture represents 4.1% of GDP and employs 52.5% of the population (World Bank). The agricultural sector is dominated by tobacco production, which is the country’s second source of foreign currency. Other agricultural exports include maize, cotton, wheat, coffee, sugarcane, peanuts, sheep, goats, and pigs. Zimbabwe's economy depends heavily on its mining and agriculture sectors; however, agriculture remains vulnerable to climate shocks: according to FAO, a severe and prolonged drought in early 2024 slashed cereal production to about 1.3 million tonnes—nearly 40% below the five-year average. Maize was hardest hit, with output estimated at 635,000 tonnes, over 60% below average, as critical rainfall shortages during key growth stages led to low yields and the loss of about half the planted area.
Industry represents 26.3% of the GDP and employs 12.3% of the workforce. Despite its potential, growth in both mining and manufacturing has remained sluggish, hindered by a challenging business climate marked by high inflation, limited access to affordable financing, and ongoing foreign currency retention policies. These policies, which require exporters to convert a portion of their earnings into local currency, continue to increase operational costs and undermine the competitiveness of exporters, particularly in the mining sector, which has struggled to fully benefit from global mineral price trends. In response to these persistent challenges, the government launched the Zimbabwe Industrial Reconstruction and Growth Plan (2024–2025) in late 2023, replacing the Zimbabwe National Industrial Development Policy. The manufacturing sector contributes about 14% of GDP but is under increasing strain, with capacity utilisation dropping to 52.3% in 2024 from 53.2% in 2023, according to the Confederation of Zimbabwe Industries.
Services, which represent 62.4% of the GDP, employ 35.1% of the workforce and are highly reliant on tourism, given that the country enjoys a number of tourist sites of global significance: tourism receipts increased from USD 1.16 billion to USD 1.20 billion in 2024, while investment in the sector grew from USD 172 million in 2023 to USD 191 million in 2024 (data Tourism Authority). The construction and financial sectors also play a role in the Zimbabwe economy. The country has a banking sector fashioned after the British model, with the Reserve Bank of Zimbabwe (RBZ) acting as the central bank. The sector comprises commercial banks, the largest subset, along with merchant banks, which facilitate trade financings and corporate transactions like mergers and acquisitions. Additionally, there are building societies offering real estate mortgages, the government-owned People’s Own Savings Bank, development financial institutions, and micro-finance entities. The financial landscape also includes insurance firms, pension funds, provident funds, investment trusts, and offshore portfolio investors.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 52.5 | 12.3 | 35.1 |
| Value Added (in % of GDP) | 4.1 | 26.3 | 62.4 |
| Value Added (Annual % Change) | 6.3 | 3.2 | 6.7 |
Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
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Latest Update: May 2025
