Harare — Zimbabwe’s economy maintained a steady growth trajectory in the first quarter of 2026, demonstrating resilience in the face of intensifying global geopolitical tensions, even as rising costs linked to the Middle East conflict ripple through international markets.
A detailed review by FBC Securities indicates that while external shocks—particularly surging energy and agricultural input costs—have filtered into the domestic economy, Zimbabwe’s current policy framework has helped cushion key sectors and preserve macroeconomic stability.
Rising Global Costs, Managed Domestic Impact
The escalation in the Middle East has triggered a sharp increase in global oil prices, with Brent crude rising from the low US$70 range to above US$110 per barrel. This has translated into higher transport, electricity, and production costs across multiple sectors.
Despite these pressures, analysts note that Zimbabwe has absorbed the initial shocks in a relatively orderly manner. Fuel price adjustments have broadly tracked global trends, but the impact has been contained within a wider stabilisation framework supported by tight fiscal and monetary policy.
Authorities estimate that roughly 40% of Zimbabwe’s petroleum imports have been affected by the ongoing conflict, underscoring the country’s exposure to global energy supply disruptions.
Price Stability Holds Amid Pressure
According to Mangaliso Ndlovu, the prices of essential goods have remained largely stable despite rising input costs. Government monitoring of a 14-product “basic basket” shows minimal price movement, suggesting that businesses have, in many cases, absorbed cost increases rather than passing them on to consumers.
This trend reflects both competitive pressures within the domestic market and a cautious approach by firms seeking to preserve demand in a still-sensitive economic environment.
Agriculture and Industry Face Input Cost Surge
The agricultural sector, a cornerstone of Zimbabwe’s economy, has not been immune to global disruptions. Fertiliser prices—particularly urea and diammonium phosphate (DAP)—have risen by an estimated 25% to 30%, driven largely by supply chain disruptions and higher international prices.
Zimbabwe remains heavily reliant on imports of key agricultural inputs from global markets, including the Gulf region. Increased shipping costs, exacerbated by longer trade routes around the Cape of Good Hope due to Red Sea disruptions, have added further pressure.
A survey by the Confederation of Zimbabwe Industries found that nearly all local firms have experienced some form of disruption, ranging from higher operational costs to delays in raw material supply. Many businesses have responded by increasing inventory buffers or sourcing from alternative, often more expensive, suppliers.
Logistics and Trade Finance Under Strain
Global logistics networks have been significantly affected by the conflict. Ocean carriers are avoiding high-risk zones, extending transit times between Asia and Europe by up to two weeks. At the same time, war-risk insurance premiums have surged, with some insurers withdrawing coverage altogether.
Air freight has also been disrupted, with key airspace closures and suspended routes to the Middle East increasing costs and reducing capacity.
In the financial sector, tighter global liquidity conditions are beginning to feed through to Zimbabwe. Trade finance instruments, including letters of credit, have become more expensive as international banks reassess risk exposure. However, improving domestic macroeconomic fundamentals are helping sustain a degree of confidence among external partners.
External Flows and Investment Outlook
Remittance inflows—an important pillar of household income—face potential downside risks if the conflict persists, particularly from Zimbabweans working in Gulf economies. Nevertheless, Zimbabwe’s diversified diaspora base provides a degree of resilience.
Investment flows from Gulf-based sovereign wealth funds into sectors such as mining and renewable energy may experience short-term delays. However, long-term investor interest remains underpinned by Zimbabwe’s substantial mineral endowment and ongoing economic reforms.
Macroeconomic Stability Anchors Outlook
Zimbabwe’s macroeconomic environment continues to show signs of stabilisation. Annual inflation stood at 4.4% in March, according to the Zimbabwe National Statistics Agency, remaining within single digits despite a slight uptick from February.
Tight monetary policy has played a central role in anchoring inflation expectations and stabilising the Zimbabwe Gold (ZiG) currency. Analysts expect this stance to remain in place in the near term, with any easing likely to be gradual and contingent on sustained price stability.
Mthuli Ncube has reaffirmed the Government’s growth projections, maintaining that the economy is on track for expansion in 2026. While growth is expected to moderate from the strong rebound seen in 2025, it is still projected to remain robust, supported by improved agricultural prospects and rising gold output.
Resilience Amid Uncertainty
Looking ahead, Zimbabwe faces a complex external environment marked by geopolitical uncertainty, volatile commodity prices, and tightening global financial conditions. Yet, the first-quarter performance suggests that the economy has developed a degree of resilience, supported by policy discipline and structural reforms.
While risks remain—particularly from energy markets, climate variability, and global trade disruptions—the overall trajectory points toward continued stabilisation. The key challenge for policymakers will be to sustain this momentum while navigating an increasingly uncertain global landscape.
For now, Zimbabwe’s economy appears to be holding firm, balancing external shocks with internal policy adjustments as it continues its gradual path toward stability and growth.
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