Staff Writer 
ZIMBABWE’s economic growth is likely to fall short of the government’s six percent projection with analysts citing currency volatility, inflation, and a persistent liquidity squeeze as threats.
The southern African country has experienced a significant depreciation of the local unit primarily driven by both demand and supply factors which resulted in inflationary pressures.
Fiscal and monetary authorities have introduced measures to stabilise inflation and exchange rate on the back of mounting inflationary pressures and exchange rate volatility.
The unintended consequences of recent interventions by authorities to steady the ZiG and curb inflation have created a liquidity crunch that is now stifling economic growth.
According to the Ministry of Finance, the economy is estimated to maintain its growth trajectory, growing by an estimated six percent in 2025 from two percent in 2024.
Treasury says the growth will be driven by a 12,8 percent expansion in agriculture, a 10,6 percent increase in electricity generation, a 9,9 percent growth in the information technology sector, and a 5,6 percent uptick in mining activities.
EFE Securities, however, said the actual growth might be around 3,1 percent due to ongoing economic challenges characterised by currency instability and inflation.
“We view the government’s GDP growth target of six percent as another pie in the sky, as there has been little done to address the three major issues that weighed on 2024 performance, thus currency instability, inflation, low-capacity utilisation and power shortages,” the securities firm said.
“Though early to call the season, the early days of the 2024/25 cropping season have been inspiring and they have offered an opportunity for growth. If the current trends for the rainy season continue, the fiscus will be less weighed on this year as expenditure for social activities is likely to drop.”
EFE Securities added that local manufacturing has been affected by undercapitalisation as the policy framework and environment continue to keep funders on the fence coupled with a lack of competitiveness against cheaper imports.
The firm said mining could emerge as the economy’s anchor with the government earmarking it as one of the expected drivers of the economy despite volatility in terms of commodity prices.
On its part, Finscent Securities said exchange rate instability, inflationary pressures, and the challenging investment climate suggest that the economic recovery may be less robust than projected.
“The outlook for Zimbabwe in 2025 is bleak. Persistent macroeconomic vulnerabilities, unsustainable public debt, structural inefficiencies, and a weak investment climate paint a challenging picture,” the firm said.
“While opportunities exist in sectors like agriculture and mining, the country’s fragile economic foundation limits its potential for recovery. Without substantial policy reforms and external support, Zimbabwe is likely to face continued economic stagnation and rising poverty.”
Morgan & Co predicted a slightly lower growth forecast of 5,5 percent this year.
The United Nations anticipates Zimbabwe’s economy to grow by 2,3 percent this year slightly lower than the 2,4 percent estimated in 2024.
Economist Prosper Chitambara said the six percent growth target is attainable, dependent on a good agricultural season.
“It’s most likely that this agriculture season is going to be a far much better one compared to last year, as a result, there is going to be a rebound in agriculture, which will also positively impact the manufacturing sector, in fact, the rest of the economy,” he said.
“We are expecting a significant improvement in electricity generation on account of the good rainfall season.
“Of course, there are still challenges, especially around the doing business environment, owing to several factors, including the issue of taxes.
“But I think overall, the economy is poised to rebound this year.”
The World Bank says Zimbabwe could register 6,2 percent economic growth in 2025 after the country saw only sluggish growth of two percent last year.
Last year, the country was impacted by an unprecedented drought, which created food insecurity for most households, heightened recessionary and inflationary pressures on the economy, as well as curtailed domestic electricity production, which resulted in increased load shedding.
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