World Bank2025-03-052025-03-052025-03-05https://hdl.handle.net/10986/42917How can Zimbabwe create the necessary fiscal space to absorb quasi-fiscal expenditures, reverse its upward trend in public debt, and support macroeconomic stability? Zimbabwe is faced with an unsustainable and growing stock of public debt. To service this debt, the Reserve Bank of Zimbabwe (RBZ) has historically engaged in quasi-fiscal operations (QFOs) through money creation, leading to high inflation and macroeconomic instability. The Government of Zimbabwe (GoZ) is thus considering options for fiscal consolidation (expenditure rationalization and increased revenue mobilization) to return Zimbabwe to a sustainable fiscal pathway. This can help stabilize the macroeconomic environment by providing an anchor for price and exchange rate stability, bolstering economic growth and job creation. This public finance review (PFR) examines options to create fiscal space and identify policy options that can contribute to a return of Zimbabwe’s fiscal accounts to a prudent trajectory. Chapter 1 contains the macro-fiscal context and developments in Zimbabwe’s real, external fiscal sectors, and considers the impact that monetary and exchange rate policy distortions have had on Zimbabwe’s public finances. Chapter 2 considers trends in, and the composition of, spending and presents options for expenditure rationalization. Chapter 3 considers trends and the composition of revenue collection and presents options for domestic revenue mobilization. Chapter 4 ties this all together to consider how the various policy options in this report will affect the fiscal balance, debt servicing, and the debt-to- gross domestic product (GDP) ratio, and how these policy options can jointly contribute toward a credible medium-term fiscal strategy for Zimbabwe.en-USCC BY-NC 3.0 IGOECONOMIC GROWTHFISCAL SPACEPUBLIC DEBTMACROECONOMIC STABILITYFISCAL CONSOLIDATIONReportWorld Bank10.1596/42917