Zambia Economic Forecast

Zambia Economic Outlook

May 21, 2019

Growth likely remained lackluster in the first quarter of the year, as exports fell sharply in Q1 on lower copper sales, while private sector activity continued to deteriorate in April on adverse weather conditions and money shortages. Compounding matters, Zambia’s macroeconomic stability remains precarious as the government struggles to service a soaring debt burden amid dwindling foreign exchange reserves. The kwacha’s depreciation since the start of the year has pushed up interest costs on external arrears. This, coupled with the recent climb in yields on government bonds, has diverted funds away from social programs and transfers to local authorities, weighing on households and businesses. In a bid to curb the escalation of debt, the country has delayed the receipt of USD 2.6 billion worth of loans.

Zambia Economic Growth

Growth is set to decelerate this year on the back of a slowdown in exports amid an uncertain global trading environment, while drought conditions curtail agricultural output. External and fiscal imbalances are likely to persist given challenges to financing ongoing spending commitments and servicing the rapidly rising debt burden. Met the why particular panelists expect GDP to grow 3.1% in 2019, which is down 0.3 percentage points from last month’s forecast, and 3.5% in 2020.

Zambia Economy Data

Population (million)15.215.716.216.717.2
GDP per capita (USD)1,8011,6611,0461,2931,563
GDP (USD bn)27.526.117.021.626.9
Economic Growth (GDP, annual variation in %)
Industrial Production (annual variation in %)  
Fiscal Balance (% of GDP)-6.2-5.7-9.3-5.8-  
Public Debt (% of GDP)  
Money (annual variation in %)11.811.324.90.120.7
Inflation Rate (CPI, annual variation in %, eop)7.17.921.17.56.1
Inflation Rate (CPI, annual variation in %)7.07.811.117.96.6
Policy Interest Rate (%)9.7512.5015.5015.5011.25
Exchange Rate (vs USD)5.556.1111.009.9311.01
Exchange Rate (vs USD, aop)5.396.168.6611.319.54
Current Account (% of GDP)-0.82.2-4.9-4.3-2.6
Current Account Balance (USD bn)-0.20.6-0.8-0.9-0.7
Trade Balance (USD billion)0.0-0.1-1.4-1.0-0.6
Exports (USD billion)
Imports (USD billion)
Exports (annual variation in %)11.0-8.7-27.3-7.625.0
Imports (annual variation in %)20.2-7.5-13.5-11.015.7
International Reserves (USD)

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Zambia Facts

Bond Yield26.000.0 %Jun 13
Exchange Rate13.220.0 %Jun 13
Stock Market0.30.0 %Jun 13

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