Zambia Economic Forecast

Zambia Economic Outlook

October 16, 2018

The economy likely lost traction in the third quarter. While exports picked up in August, imports accelerated at a markedly swifter pace in the month. Thus, the external sector likely dragged on growth more severely in Q3 compared to the previous quarter. Moreover, private sector activity contracted more sharply in September than in August, reflected by a further drop in the PMI below the critical 50-point threshold which separates improvement from deterioration in business conditions. After some mining companies abandoned expansion plans over the government’s proposal to introduce new mining duties and higher royalties to help reduce the escalating debt burden, which could lead to lower copper output, the Finance Ministry announced on 7 October that it was open to dialogue with mining companies over the change in the tax regime.

Zambia Economic Growth

Growth is expected to accelerate next year on the back of a solid performance by the external sector. Rapidly rising external debt servicing costs against the backdrop of a weakening kwacha continue to pose downside risks to the outlook. Met the why particular panelists expect GDP to grow 4.1% in 2019, which is down 0.4 percentage points from last month’s forecast, and 4.4% 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 %Oct 17
Exchange Rate11.930.0 %Oct 18
Stock Market0.40.0 %Oct 11

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