Zimbabwe is at a critical economic turning point as recent improvements in macroeconomic stability create an opportunity to accelerate growth, expand formal employment and improve household incomes, according to a new World Bank Group report.
The Zimbabwe Growth and Jobs Report says fiscal and monetary discipline helped bring local-currency inflation into single digits in early 2026, marking the first time that has happened since 1997. The country also recorded average real GDP growth of nearly 6% between 2021 and 2025.
However, Zimbabwe’s recent economic growth has not yet translated into widespread gains in productive employment or household incomes. Around 80% of Zimbabweans currently work in the informal sector, where median monthly earnings stand at about $130, while nearly half of the population lives below the international poverty line.
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The report finds that workers leaving agriculture have largely moved into low-productivity retail and informal services rather than formal manufacturing and higher-value service industries. This has limited the extent to which economic expansion has generated productive jobs and higher incomes.
Zimbabwe could face slower progress if current economic trends continue. The report projects average growth of about 4% through 2030 under the baseline scenario, potentially delaying the country’s ambition of reaching upper-middle-income status until 2036.
More ambitious structural reforms, however, could significantly change that trajectory. The World Bank estimates that accelerating reforms could increase Zimbabwe’s real GDP by an additional 10.7% above the baseline by 2030 and 26.9% by 2040. Such reforms could support the creation of up to 230,000 new jobs and increase real worker earnings by more than 30% over the period.
The report identifies four areas that Zimbabwe will need to prioritize: maintaining macroeconomic stability and resolving outstanding debt arrears; improving electricity generation and grid reliability; creating a more business-friendly regulatory environment; and increasing private-sector investment.
Reliable electricity is particularly important. Power shortages are estimated to cost Zimbabwe around 6.1% of GDP each year, making investment in generation and grid infrastructure a major potential driver of economic growth. Improvements to transport corridors and agricultural irrigation are also identified as priorities.
Zimbabwe could further strengthen private-sector activity by simplifying business permits, reducing administrative fees, easing cross-border trade procedures and streamlining tax policies. Stronger land tenure, commercial justice, financial-sector development and wider access to credit would also help businesses expand and formalize.
The World Bank said the opportunity created by Zimbabwe’s recent stabilization will require sustained action over several years. Victor Steenbergen, World Bank Senior Economist and lead author of the report, emphasized that improving power reliability and trade facilitation could deliver early economic gains while laying the foundation for deeper legal and financial reforms.
For Zimbabwe, the challenge is now to convert macroeconomic stability into productive investment, better-paying jobs and sustained improvements in living standards. The country’s ability to maintain reform momentum could determine whether its recent stabilization becomes a lasting foundation for broader economic transformation.
