Monthly Economic Update-December 2024

1) Economic Performance

Domestic economy

Zimbabwe’s economic growth is projected to reach about 6% in 2025 as the impact of the 2024 El Niño-induced drought begins to fade. The report notes that the 2024 drought (described as the worst in over 40 years) resulted in crop failures and water depletion, while macro vulnerabilities (including electricity supply constraints) weighed on investment and growth. Recovery is expected in 2025, with increased mining activity, especially lithium, and improved gold production. 

2) Inflation

Weighted inflation

Weighted inflation (combining prices in local and foreign currency) declined for the second consecutive month. Year-on-year weighted inflation fell from 41.1% (Nov 2024) to 36.3% (Dec 2024), while month-on-month weighted inflation decreased from 2.2% to 1.1%. The report attributes the MoM decline primarily to Food & Non-Alcoholic Beverages, which recorded a 2.8% decrease. 

USD inflation

The year-on-year USD inflation rate eased to 2.5% in December 2024 (from 3.3% in November). Month-on-month USD inflation increased to 0.6%. Food & Non-Alcoholic Beverages recorded a 1.9% increase within the USD CPI during the period. 

ZiG inflation

Month-on-month ZiG inflation fell sharply to 3.7% in December 2024, down from 11.7% in November 2024, marking the second consecutive month of decline.

3) Poverty Datum Line

The Total Consumption Poverty Line (TCPL) rose by 4.1% in December 2024 to ZiG 1,156.67 (from ZiG 1,110.72 in November). For a family of six, the TCPL was ZiG 6,940.02. 

The Food Poverty Datum Line (FPDL) increased by 4.6% to ZiG 805.95 (from ZiG 770.84). For a family of six, the FPDL was ZiG 4,835.70, underscoring that a significant share of household income is allocated to food. 

4) Financial Sector

Money supply (M3)

Broad money (M3) increased by 16.8% from ZiG 75.01bn (Sept 2024) to ZiG 87.82bn (Oct 2024), which the report notes was a slower pace than the 61.04% recorded in September 2024. Year-on-year, M3 growth increased to 1,203% in October 2024 (from 1,093% in September 2024). 

Interest rates

The RBZ Monetary Policy Committee meeting of 3 December 2024 maintained the bank policy rate at 35%, and kept statutory reserve requirements unchanged: demand/call deposits at 30%, and savings/time deposits at 15%, for both local and foreign currency. 

As of 13 December 2024, weekly average minimum lending rates in ZiG were 40.63% (individuals) and 38.08% (corporates). Average minimum deposit rates (ZiG) were 3.75% (savings), 5.07% (1-month), and 5.30% (3-month). 

Foreign currency market and ZiG/USD

The update notes broad USD strength across the analysed currency basket and links this to resilient US economic conditions, elevated interest rates, and global uncertainty. It also highlights expectations that policy choices (including potential tariffs) could further support USD demand. 

In December 2024, the ZiG depreciated by 1.35% on the interbank market (from ZiG25.45 to ZiG25.80 per 1 USD), while appreciating by 2.7% on the parallel market (from ZiG37.50 to ZiG36.50 per 1 USD). The exchange rate premium narrowed from 47% to 41%. 

Equities markets

The Zimbabwe Stock Exchange (ZSE) recorded a decline in December 2024: local currency market cap fell by 18.5% and USD market cap by 19.5%. The All-Share Index decreased by 17.9%. In contrast, VFEX showed resilience with the market cap up 3.4% and its All-Share Index up 1.9%.

5) Various Sectors of the Economy

External sector

Zimbabwe’s exports rose to US$905.2m in November 2024 (up 29.7% from October), while imports increased to US$952.1m (up 13.9%). The trade deficit narrowed to US$46.9m from US$137.8m. The report notes export concentration in semi-manufactured gold, tobacco, and nickel mattes. 

Mining sector

The report highlights mixed mining performance due to policy inconsistencies, commodity price volatility, and power shortages, but projects sector growth of 5.6% in 2025, supported by increased output in PGMs, gold, chrom,e and diamonds. It also notes higher gold deliveries in December 2024 and strong contributions from small-scale miners. 

Agriculture sector

Agriculture is described as rebounding in 2025 (expected growth 12.8%) after a contraction in 2024, with support from expected La Niña conditions, irrigation initiatives, and improved wheat outcomes. The update includes highlights such as record wheat harvest performance and expanded Pfumvudza/Intwasa implementation. 

Energy sector

The update notes a decline in electricity generation during the period under review, driven by reduced output from Hwange and low Kariba utilisation due to water constraints. It highlights expected improvements in Kariba generation with increased water allocations, alongside ongoing reliance on imports and growing private sector participation. 

Manufacturing, property, and tourism

The report summarises manufacturing recovery expectations for 2025, a property sector supported by investment (including diaspora flows), and tourism activity that outperformed in 2024, with continued growth expectations into 2025 supported by facilitation and events. 

6) Regional Economies

The report notes that sub-Saharan Africa's growth is projected to rebound to 4.2% in 2025 (IMF), as weather-related impacts fade and supply constraints ease. 

Selected highlights

• South Africa: IMF projects 1.5% growth in 2025; policy rate at 7.75% after a cut in Nov 2024. 

• Botswana: IMF projects 5.2% growth in 2025, linked to expected recovery in diamond exports. 

• Zambia: IMF projects 6.2% GDP growth in 2025; inflation remains elevated.

• Malawi: World Bank projects 4.2% growth in 2025, supported by agriculture recovery.

7) International Economies

Global growth is projected at 3.2% in 2025 (IMF), with risks linked to geopolitical tensions, trade disputes, and high debt levels. 

Selected highlights

• United States: Growth projected to moderate to 2.2% in 2025 (IMF).

• China: Growth projected at 4.5% in 2025 amid trade and property-sector pressures. 

• Germany: IMF projects 0.8% growth in 2025; inflation accelerated to 2.6% in Dec 2024. 

• United Kingdom: IMF kept 2025 growth forecast at 1.5%, amid weak 2024 momentum. 

8) Commodities Markets

The update notes December 2024 recorded the second consecutive month of average price declines for gold, platinum, and silver, while crude oil also edged lower on average.