HARARE, Nov 27 (Reuters) - Zimbabwe expects modest economic growth for 2026 compared with this year due to external headwinds, Finance Minister Mthuli Ncube said during a budget presentation on Thursday, as the country tries to recover from a severe drought and currency volatility.

Gross domestic product this year is expected to grow to 6.6%, above an earlier forecast of 6%, Ncube told lawmakers in parliament. Growth should be boosted by a strong recovery in the agriculture and mining industries, after an El Nino-induced drought which dragged growth to 1.7% in 2024.

Sign up here.

But growth next year is seen at 5%, tempered by external challenges, Ncube said.

"While this marks a moderate recovery, growth remains softer than expected due to persistent global headwinds, weak external demand, and energy deficits that are afflicting a few countries, and also due to financing constraints," Ncube said.

The government is targeting a budget deficit of 0.2% of GDP in 2026, down from an anticipated 0.3% this year.

Inflation, which currently sits at 19.0% year-on-year in November, is forecast to fall closer to 10% by year-end and reach single-digit levels by early 2026 due to exchange rate stability and stringent fiscal and monetary policies, Ncube added.

"If this happens that will be the first time we achieve that kind of single-digit domestic inflation since 1997," he said.

The International Monetary Fund said last month that it remains unable to provide financial support to Zimbabwe due to its arrears, but acknowledged progress in ongoing economic reforms as discussions continue over a potential staff-monitored program.

Zimbabwe's total public debt stood at $23.4 billion as of the latest figures, with external debt accounting for $13.6 billion.

"As part of implementation of the Arrears Clearance and Debt Resolution Process, government is in discussion with the IMF with a view to sign off a staff-monitored programme during the first quarter of 2026."

https://www.reuters.com/world/africa/zimbabwe-sees-economic-growth-slowing-5-2026-66-this-year-headwinds-weigh-2025-11-27/