Zimbabwe

After facing significant macroeconomic volatility in recent decades, Zimbabwe has recently experienced a degree of stability thanks to tighter policies. The halting of quasi-fiscal operations and monetary financing by central bank have helped significantly reduce inflation and exchange rate pressures. Growth has recovered as extreme weather shocks subsided, and terms-of-trade significantly improved. But challenges remain from fiscal financing pressures with very limited access to official external financing and the accumulation of domestic arrears, low monetary policy credibility, a highly dollarized monetary system, low reserve buffers, a persistent gap between the official and parallel exchange rates, and economic governance vulnerabilities.