HARARE, May 7 (NewsDay Live) - Zimbabwe’s 2025 GDP prints look explosive at first glance. Quarterly output at current prices rose to ZWG 448 billion by Q4 2025, up from ZWG 142 billion in Q1 2024. But the nominal surge is largely a pricing story. Constant-price data rebased to 2023 shows real growth mostly in the single digits to low double digits, while the GDP deflator has multiplied roughly twentyfold over the same period.
That divergence between volumes and prices is the central analytical fault line in the latest national accounts.
The introduction of the Zimbabwe Gold (ZiG) currency in April 2024 was meant to stabilise pricing. Yet ZimStat’s constant-price series indicates that inflation dynamics continued to dominate. The GDP deflator, indexed near 100 in 2023, jumped to about 850 by Q1 2024 and reached 2,347 by Q4 2025. Put differently, output that would have been valued at ZWG 100 in 2023 is being recorded at more than ZWG 2,300 in nominal terms by end-2025. The implication is stark: the bulk of nominal GDP expansion reflects price effects rather than additional output.
Where real growth is actually coming from
Agriculture drove the real economy in 2025. Year-on-year growth accelerated from 5.9% in Q1 to 31.2% in Q2 and peaked at 49.9% in Q3 before easing to 25.2% in Q4. This is a rebound from the drought-induced contraction of 2024 rather than a structural step-change in productivity. The base effect matters: a recovery from a deep slump can inflate growth rates without implying sustained capacity gains.
Transport and storage followed a similar trajectory—strong early growth (33.6% in Q1, 21.7% in Q2) before decelerating—consistent with increased goods movement tied to the agricultural recovery.
Information and communication stands out as a cleaner signal. Real growth was steady and, in places, accelerating (7.5%, 11.5%, 8.7%, 14.6% across the quarters). This suggests genuine volume expansion driven by demand for data services, mobile connectivity and fintech—less distorted by base effects or commodity cycles.
Construction underscores the unevenness of the cycle. The sector contracted in the first half (−6.3% in Q1, −0.3% in Q2) before rebounding sharply in the second half (26.4% in Q3, 15.9% in Q4), likely reflecting delayed project execution as currency conditions stabilised.
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Electricity also posted solid gains, particularly in Q2 (31.2%), though here too base effects from prior shortfalls are likely amplifying the growth profile.
Weak breadth beneath the surface
Beyond these pockets, the picture is less convincing. Wholesale and retail trade—arguably the best proxy for household demand—grew just 3.7%, 1.4%, 1.7% and 1.3% across the four quarters. Adjusted for population growth, that is effectively flat.
Manufacturing shows a gradual improvement (1.1%, 4.6%, 6.9%, 6.2%), but from a low base. The trajectory is positive, yet not strong enough to signal a decisive industrial recovery.
Financial and insurance activities delivered consistent real growth (8.8%, 11.7%, 6.5%, 8.2%), though part of this expansion reflects increased intermediation in a complex, multi-currency environment rather than underlying productive capacity.
More concerning are outright contractions in core infrastructure. Water supply, sewerage and waste management shrank in real terms throughout the year (−22.1%, −21.9%, −3.4%, −6.1%). Persistent decline in this category points to underinvestment and deteriorating service delivery—conditions that typically constrain long-term growth.
Mining, a traditional anchor sector, was volatile: a contraction in Q1 (−6.9%), strong rebounds in Q2 and Q3, and moderation in Q4. The pattern reflects sensitivity to power supply, global commodity prices and operational bottlenecks rather than stable expansion.
Deflators tell the real story
Sector-level deflators reinforce the inflation narrative. By Q4 2025, most sectors recorded deflators above 1,700 relative to the 2023 base. Accommodation and food services reached 5,759; human health and social work 4,224; mining 2,772; agriculture 1,747.
These magnitudes are inconsistent with price stability. A functioning nominal anchor would keep deflators close to the base index or at least within a narrow band. Instead, the data suggests widespread repricing across the economy, with nominal values increasingly detached from underlying real activity.
What the data implies
Three structural conclusions follow.
First, real growth is concentrated in sectors that are either cyclical (agriculture) or still relatively small (ICT). That limits the breadth and durability of expansion.
Second, sectors that underpin broad-based welfare retail, manufacturing and basic services are either stagnant or contracting in real terms. This weakens transmission from GDP growth to household incomes.
Third, the deflator trajectory indicates that ZiG has yet to anchor expectations. Pricing behaviour continues to reflect inflationary inertia rather than confidence in a stable unit of account.
Zimbabwe’s 2025 national accounts do show an economy capable of recovery. But the constant-price data makes clear that inflation still dominates the signal. Until deflators move materially closer to their base, nominal GDP will overstate progress and the real story will remain in the footnotes rather than the headline.
