Zimbabwe - Country Growth and Jobs Report : Modeling Reform Impact in Zimbabwe - Online Appendix

Overview & Synopsis

A country-specific version of MFMod was estimated using the latest available data. The model uses the US dollar as its base currency to avoid currency-related complications, which improves the reliability of real-economy modelling but limits the model's ability to capture the implications of local currency volatility. A baseline scenario was constructed through 2050, reflecting a plausible long-term development path on the macroeconomic and fiscal trajectory in the absence of new reforms. The baseline pathway is aligned with MPO projections released in April 2026. All policy simulations are evaluated relative to this baseline. MFMod is a semi-structural macro-fiscal model that links output, prices, public finances, and the labor market. In the long run, output converges to a balanced growth path determined by total factor productivity (TFP), capital, and labor (including human capital). In the short run, nominal rigidities in wages and prices allow demand shocks to have nominal and real effects. For the CGJR, MFMod is used to trace how reforms affect aggregate demand, potential output, and labor market outcomes, and to quantify how policies translate into growth and more and better jobs.