Zambia Economic Forecast

Zambia Economic Outlook

October 20, 2020

Recently released GDP data revealed that the economy contracted 2.1% in annual terms in Q2 (Q1: -0.3% year-on-year) as the Covid-19 fallout hammered activity in the construction and wholesale and retail trade sectors. Moving forward, although some positive signs have emerged, the recovery seemingly remains subdued. Despite bouncing back solidly in September, the private sector PMI was still below February’s pre-pandemic levels and in contractionary mode throughout Q3. Encouragingly, however, merchandise exports soared in July–August on improving demand and prices for copper. Meanwhile, in late September, both S&P Global Ratings and Fitch Ratings downgraded the country’s credit rating to CCC- and C, respectively, amid the increased possibility of default following the government’s request to bondholders to delay debt payments.

Zambia Economic Growth

The economy is set to shrink notably this year due to the impact of Covid-19. Although output is seen recovering next year, growth is poised to remain tepid. Risks, which are heavily skewed to the downside, include uncertainty over the course of the pandemic, subdued global demand impacting tourism and copper exports, and the government’s growing debt service pains. FocusEconomics panelists see GDP growing 1.9% in 2021, which is up 0.2 percentage from last month’s forecast, before picking up to 2.8% in 2022.

Zambia Economy Data

2015 2016 2017 2018 2019
Population (million)16.216.717.217.818.3
GDP per capita (USD)1,5081,2931,5661,608-  
GDP (USD bn)24.521.627.028.6-  
Economic Growth (GDP, annual variation in %)2.93.83.54.0-  
Industrial Production (annual variation in %)0.25.65.44.3-  
Fiscal Balance (% of GDP)-9.5-6.1-7.7-8.3-  
Public Debt (% of GDP)62.360.761.978.1-  
Money (annual variation in %)24.90.120.715.412.2
Inflation Rate (CPI, annual variation in %, eop)21.17.56.17.911.7
Inflation Rate (CPI, annual variation in %)10.117.96.67.59.2
Policy Interest Rate (%)15.5015.5010.259.7511.50
Exchange Rate (vs USD)11.009.9310.0111.9414.09
Exchange Rate (vs USD, aop)8.6610.319.5410.4812.92
Current Account (% of GDP)-2.3-3.2-1.6-1.2-  
Current Account Balance (USD bn)-0.6-0.7-0.4-0.30.2
Trade Balance (USD billion)0.20.21.00.50.7
Exports (USD billion)7.46.58.29.07.2
Imports (USD billion)7.26.37.38.56.5
Exports (annual variation in %)-28.0-11.225.79.9-19.9
Imports (annual variation in %)-16.0-12.515.217.4-23.7
International Reserves (USD)3.02.42.11.61.4

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Zambia Facts

Value Change Date
Bond Yield33.000.0 %Dec 31
Exchange Rate14.090.0 %Jan 01
Stock Market0.30.0 %Jan 06

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