HARARE, Nov 27 (Reuters) – Zimbabwe expects modest economic growth for 2026 compared with this year due to external headwinds, Finance Minister Mthuli Ncube said during a budget presentation on Thursday, as the country tries to recover from a severe drought and currency volatility.<\/p>\n
Gross domestic product this year is expected to grow to 6.6%, above an earlier forecast of 6%<\/a>, Ncube told lawmakers in parliament. Growth should be boosted by a strong recovery in the agriculture and mining industries, after an El Nino-induced drought which dragged growth to 1.7% in 2024.<\/p>\n Sign up here.<\/a><\/p>\n But growth next year is seen at 5%, tempered by external challenges, Ncube said.<\/p>\n “While this marks a moderate recovery, growth remains softer than expected due to persistent global headwinds, weak external demand, and energy deficits that are afflicting a few countries, and also due to financing constraints,” Ncube said.<\/p>\n The government is targeting a budget deficit of 0.2% of GDP in 2026, down from an anticipated 0.3% this year.<\/p>\n Inflation, which currently sits at 19.0% year-on-year in November, is forecast to fall closer to 10% by year-end and reach single-digit levels by early 2026 due to exchange rate stability and stringent fiscal and monetary policies, Ncube added.<\/p>\n “If this happens that will be the first time we achieve that kind of single-digit domestic inflation since 1997,” he said.<\/p>\n The International Monetary Fund said last month that it remains unable to provide financial support<\/a> to Zimbabwe due to its arrears, but acknowledged progress in ongoing economic reforms as discussions continue over a potential staff-monitored program.<\/p>\n Zimbabwe’s total public debt stood at $23.4 billion as of the latest figures, with external debt accounting for $13.6 billion.<\/p>\n “As part of implementation of the Arrears Clearance and Debt Resolution Process, government is in discussion with the IMF with a view to sign off a staff-monitored programme during the first quarter of 2026.”<\/p>\n Reporting by Chris Takudzwa Muronzi; Our Standards: The Thomson Reuters Trust Principles., opens new tab<\/a><\/p>\n
\nAdditional reporting by Anathi Madubela;
\nWriting by Sfundo Parakozov;
\nEditing by Sharon Singleton and Leslie Adler<\/p>\n