HARARE – Zimbabwe’s macroeconomic stability in 2025 reflects a deliberate policy shift anchored in monetary discipline, fiscal restraint and improved coordination among policymakers, analysts have said.
This lays a firm foundation for the National Development Strategy 2 (NDS 2) and the long-term Vision 2030 agenda. NDS 2 is Zimbabwe’s medium-term blueprint for the 5 years to 2030, by which Zimbabwe’s economy is expected to have attained middle-income status.
According to the Reserve Bank of Zimbabwe’s recent Monetary and Financial Conditions Snapshot, inflation, exchange rate movements and liquidity conditions improved markedly during the year, signalling a decisive break from past instability cycles driven by excess liquidity and fiscal slippages.
Annual ZiG inflation slowed to 15 percent by the end of 2025, well below the official 30 percent target, while month-on-month inflation averaged 0,4 percent between February and December, providing a more predictable pricing environment for households and businesses.
Economist Ms Gladys Shumbambiri-Mutsopotsi said the inflation outcome reflected improved policy credibility and discipline.
“The clear separation between fiscal spending and monetary financing has been critical,” she said. “Zero central bank financing of Government expenditure removed a major inflation trigger and reinforced confidence in policy execution.”
The RBZ confirmed that reserve money growth was contained at ZiG5,3 billion as at end-December 2025, underscoring a tight liquidity stance aligned with fiscal restraint. The Treasury also maintained a cautious spending approach, with budget outcomes broadly balanced, supported by improved revenue collection and tighter controls on unbudgeted expenditure.
Ms Shumbambiri-Mutsopotsi said predictability in fiscal execution had helped stabilise market expectations. “Consistency matters. When policy signals are backed by action, confidence improves.”
Exchange rate developments further strengthened the policy narrative. The interbank exchange rate largely oscillated around ZiG26 per US dollar, while the parallel market premium was contained below 20 percent for most of 2025, supported by the Willing-Buyer Willing-Seller framework and improved foreign currency availability.
Economist Mr Tinevimbo Shava said exchange rate predictability was central to restoring confidence in the domestic currency and supporting de-dollarisation efforts.
“Stability in the exchange rate is essential for rebuilding trust in the ZiG,” he said. “It supports pricing discipline and gradually encourages wider local currency usage, which is a key pillar of the mono-currency roadmap.”
Foreign currency receipts rose to US$16,2 billion in 2025, up from US$13,3 billion in 2024, enabling the steady accumulation of reserves. By year-end, foreign currency reserves had reached US$1,2 billion, equivalent to 1,5 months of import cover. The reserves now provide backing equivalent to six times ZiG reserve money and nearly double total ZiG deposits, strengthening confidence in the local currency and reinforcing monetary stability.
Use of the ZiG has also increased, accounting for 30 to 40 percent of national payment system transactions, while currency in circulation rose to ZiG510 million, representing three percent of broad money, signalling gradual progress towards broader currency acceptance.
Investment analyst Mr Amon Chirenje said financial markets were increasingly pricing in policy consistency, although sentiment remained cautious.
“The gains achieved are aligned with the conditions precedent outlined under NDS 2 for macroeconomic stability and financial sector deepening,” he said. “However, investors want to see this discipline sustained before shifting decisively from defensive positioning to growth-oriented strategies.”
He noted that while domestic institutional participation had strengthened, foreign inflows remained limited due to concerns over long-term policy certainty and currency convertibility.
Economists cautioned that the gains achieved in 2025 need to be defended. Risks such as climate-related shocks, energy supply disruptions, global commodity price volatility and any return to quasi-fiscal activities could undermine stability if discipline weakens.
Analysts say Zimbabwe’s macroeconomic framework reflects firmer policy foundations than in recent years, positioning the economy to consolidate stability, deepen the financial sector and advance the Vision 2030 objective of a sustainable, mono-currency system. – Herald
