Staff Reporter

The World Bank has issued a warning that Zimbabwe’s recent economic stability, characterized by local currency consolidation and easing inflation, is highly fragile.

It cautioned that this hard-won progress is at risk of collapse unless the government immediately addresses a rapidly worsening debt burden and deep structural weaknesses.

In its latest assessment, the Bretton Woods institution acknowledged Harare’s impressive progress on macroeconomic stability but cautioned that this momentum is severely threatened by a soaring public debt of US$23.4 billion and persistent policy slippages.

World Bank senior economist Victor Steenbergen highlighted the urgency, stating that while near-term growth prospects remain positive, they are clouded by formidable downside risks.

Zimbabwe’s total public debt has climbed by US1.9 billion from US21.5 billion last year to a US$23.4 billion.

The World Bank emphasized that this burden is choking fiscal space and restricting the country’s access to vital concessional financing.

Furthermore, despite periods of moderate economic recovery, poverty levels remain stubbornly high.

Extreme poverty, which peaked at 49% in 2020, is only projected to decrease marginally from 47.6% in 2024 to 45.8% in 2025.

The institution stressed that sustained policy discipline and the deepening of reforms are non-negotiable for lasting recovery.

Steenbergen highlighted the need to press on with the Structured Dialogue Platform for arrears clearance and debt resolution, which the Bank calls the linchpin of Zimbabwe’s long-term recovery.

The country’s foreign exchange reserves, estimated at only US$950 million in 2025, cover just 1.1 months of imports, exposing Zimbabwe to major external shocks.