The World Bank says Zambia’s real GDP growth projection for 2019 is likely to be at 3.3 per cent, down from 3.5 per cent last year, triggered by the country’s mounting debt.
And the International Monetary Fund (IMF) has projected Zambia’s GDP growth to slump to 2.9 per cent next year, triggered by the Zambian government’s continued fiscal challenges brought on by the mounting external debt problem.
Addressing questions from journalists following the launch of the Africa Economic update at World Bank offices, Monday, World Bank senior economist Gerard Kambou said that Zambia’s real GDP growth projection for the present year had been projected to drop to 3.3 per cent, down from 3.5 per cent recorded last year brought about by the country’s growing debt.
“On economic growth rate, starting with Zambia, our estimate for 2018 for Zambia is 3.5 per cent, that’s steady from 2017 with growth of about 3.4 per cent. Going into 2019, we have forecast a soft growth to around 3.3 per cent. What we have noticed in Zambia, the macro framework presents quite a challenge for the authorities. We mentioned rising inflation, which is a concern; you have inflationary pressure in the economy and that, to some extent, derives from the difficulties that the (Zambian) government is under to control its fiscal position,” Kambou said.
“Spending remains quite elevated and there’s a struggle to raise revenues in order to be able to finance those expenditures. And because of these difficulties, you have pressure coming in from other sources that are also adding to the situation in inflation.”
He also cited government’s continued borrowing to finance various obligations as one key challenge that would impede economic growth.
“In particular, the government has resorted to borrowing, not only domestically, but also abroad. And the debt level in Zambia is quite high, and it is also quite a concern because of the large component of foreign currency-denominated debt that is posing a concern,” explained Kambou.
According to World Bank data, growth in sub-Saharan Africa has been downgraded to 2.3 per cent for 2018, down from 2.5 per cent in 2017, according to the April, 2019, issue of Africa’s Pulse, the World Bank’s bi-annual analysis of the state of African economies released, Monday.
Economic growth remains below population growth for the fourth consecutive year.
And IMF data projected Zambia’s GDP growth to slump to 2.9 per cent next year, triggered by the Zambian government’s continued fiscal challenges brought on by the mounting external debt problem.
In a briefing held, Tuesday, from its Washington D.C.-based offices, the IMF data was released for sub-Saharan African economies, which included Zambia as one of the economies whose growth projection dropped to 2.9 per cent next year from a projected 3.1 per cent this year.