Zimbabwe’s economy “is experiencing a degree of macroeconomic stability” after a sharp contraction last year, the International Monetary Fund (IMF) has said following a recent mission to the country. But it says it will only grant Zimbabwe’s bid for a Staff-Monitored Program (SMP) if the government takes more “decisive steps” on a set of recommended reforms.

The IMF team was in Harare from June 4 to June 18 as part of routine consultations. The IMF team was also here to discuss an SMP, a programme under which Zimbabwe would agree on policy steps that it would implement under IMF’s supervision.

The SMP doesn’t come with new money, but Zimbabwe needs it as a route to reaching a deal for arrears clearance with international creditors.

In its latest report, the IMF says Zimbabwe has managed to stabilise the ZiG by controlling spending, at a time the economic outlook has improved due to a recovery in agriculture and mining.

Here’s what the IMF is saying:

No SMP—yet
Despite these improvements, the IMF says Zimbabwe still has work to do before any SMP can be approved.

“In the context of the requested SMP, IMF staff stands ready to resume discussions in due course once decisive steps have been taken by authorities to address the key policy issues highlighted by the mission,” the IMF said.

Wojciech Maliszewski, who led the mission to Zimbabwe, says he has seen some progress.

“Looking at the current macroeconomic situation comparing it to what the country was when I started my assignment and before, its massive progress, significant progress,” he said. But, a lot of work needs to be done before an SMP, he told Bloomberg.

Cautious recovery

The IMF says “Zimbabwe is experiencing a degree of macroeconomic stability despite lingering policy challenges.” Growth is expected to rebound to 6 % in 2025.

The ZiG is stable on both the official and parallel market rates, helping to bring month-on-month inflation down to an average of 0.5% over the period February to May 2025. However, the gap between the two exchange rate remains at 20%. The IMF backs government’s repeal of Statutory Instrument 81A of 2024—which had forced businesses to use the official rate in the pricing of goods and services.

What does the IMF recommend

Fiscal discipline: 2026 a test
IMF says Zimbabwe must close its 2025 financing gap without resorting to money printing or delaying payments, and to control spending through tighter oversight of arrears. It says the 2026 budget would be critical in showing real fiscal discipline and improved financial management.

Currency: Reform needes
The Fund is calling for a more transparent foreign exchange market. Zimbabwe must shift away from the 70:30 export surrender requirements to directly converting export earnings via banks. The central bank, it added, should limit its interventions to managing volatility, not setting the rate. Over time, it recommended introducing a deposit facility and phasing out direct controls, paving the way for more flexible monetary tools and eventually lifting restrictions on capital flows.

Tighter oversight of Mutapa Fund
The IMF raised concerns about fiscal risks from state-owned enterprises and the sovereign wealth fund. It called for stronger governance, transparency, and oversight of the Mutapa Investment Fund, in line with global best practices.

On the 2030 mono-currency target

Zimbabwe plans to end the multicurrency system by 2030. IMF says to support the ZiG in time for that, Government boost demand for the currency by using it more in its own activities, from public revenue and spending. It stressed the need to reassure markets that while domestic transactions may shift to a single currency, deposits will remain accessible in both ZiG and U.S. dollars.

NewZWire