Natalie Nyathi
Zimbabwe’s economic story is changing significantly as recent updates to its Gross Domestic Product reveal a larger and more dynamic economy than previously thought. According to an article in the Herald, the Zimbabwe National Statistics Agency has rebased the country’s GDP to around US$44.4 billion for 2025, a notable increase from the earlier estimate of US$35.2 billion. This adjustment reflects a broader scope of economic activity, particularly in the growing informal sector and the rise of new businesses since 2019.
According to the herald , the rebasing exercise has uncovered years of silent growth that had not been accounted for. Finance Minister Professor Mthuli Ncube pointed out that the updated GDP now includes parts of the economy that were previously overlooked, especially in the informal sector. This revision places Zimbabwe as the fifth-largest economy in Southern Africa, following South Africa, Angola, Tanzania, and the Democratic Republic of Congo.
The revised GDP figures carry several important implications for Zimbabwe’s economic future. The increase in per capita income has surpassed the US$3,000 mark for 2025, indicating progress toward achieving upper-middle-income status under the country’s Vision 2030. Additionally, the debt-to-GDP ratio has decreased, providing more flexibility for fiscal authorities as they pursue economic reforms and debt restructuring. The larger GDP also offers the government greater fiscal space, which could attract new investments and improve the country’s overall debt profile.
A significant factor in the GDP revision is the recognition of the substantial role played by Zimbabwe’s informal sector. While this sector provides jobs and livelihoods for many, it also creates challenges in terms of revenue collection and economic management. Studies suggest that over half of Zimbabwe’s economic activity happens outside the formal sector. Many informal businesses struggle with a lack of social protection, access to finance, and decent working conditions. In response, the government is working to formalize more parts of the economy and expand digital platforms to bring additional businesses into the tax system.
Despite the positive news from the GDP revision, Zimbabwe continues to face serious economic hurdles. The nation has a history of macroeconomic instability, which is partly due to ongoing fiscal pressures. Climate challenges, such as droughts and power shortages, disrupt agricultural production and overall economic activity. External debt remains high, limiting access to international financing, and income inequality is a pressing issue that the government is trying to address through progressive taxation and social protection measures.
Looking ahead, the International Monetary Fund projects a growth rate of around six percent for Zimbabwe’s economy in 2025, driven by improved macroeconomic stability and rising gold prices. The World Bank also has a positive outlook, contingent on addressing ongoing economic challenges and engaging in debt resolution.