Zambia Economic Forecast

Zambia Economic Outlook

November 13, 2018

Recently-released data showed that the economy grew 3.9% in annual terms in the second quarter, following Q1’s marked deceleration in growth to 2.7%. Despite a slowdown in the crucial mining and quarrying sector, a notably swifter expansion in manufacturing output, combined with an acceleration in wholesale and retail trade, as well as in construction, drove the upturn. Export growth remained strong in the third quarter, with copper prices largely stable throughout the period. Private sector activity, however, deteriorated significantly at the outset of the fourth quarter, as a weaker kwacha and higher fuel costs weighed on demand. Investor confidence has been hard hit by the ongoing stalemate with the IMF and the aid freeze in September owing to corruption allegations.

Zambia Economic Growth

Buoyant export growth should propel the economy next year. Headwinds to the outlook arise from a hefty external debt burden, with a depreciation in the kwacha exacerbating debt-servicing costs, which puts the economy at increasing risk of debt distress and further credit rating downgrades. FocusEconomics panelists expect GDP to grow 3.6% in 2019, which is down 0.5 percentage points from last month’s forecast, and 4.1% 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 %)7.07.810.117.96.6
Policy Interest Rate (%)9.7512.5015.5015.5010.25
Exchange Rate (vs USD)5.556.4011.009.9310.01
Exchange Rate (vs USD, aop)5.396.168.6610.319.54
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 %)10.0-8.7-27.3-7.625.0
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 %Dec 12
Exchange Rate11.930.0 %Dec 12
Stock Market0.10.0 %Dec 11

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