Zambia Economic Forecast

Zambia Economic Outlook

July 21, 2020

The Covid-19 pandemic seems to have pushed the economy into a severe recession in the first half of this year, after economic activity ground to a near halt at the end of 2019. The external sector appears to have been particularly hard hit in H1 as depressed global copper prices likely eviscerated exports and eroded the country’s foreign reserves. In a similar fashion, domestic demand likely shrunk considerably in the same period due to pandemic-related restrictions. That said, the PMI pulled away from May’s record low in June, signaling that the contraction in private sector activity might have bottomed out at the end of Q2. Turning to Q3, the macroeconomic backdrop appears volatile: The government is locked in talks with the IMF over Covid-19-related emergency support amid a widening budget financing gap.

Zambia Economic Growth

The 2020 outlook remains grim at the outset of Q3 as Covid-19 is set to extinguish both domestic activity and foreign demand. Strict containment measures and a sliding kwacha are seen curbing domestic demand, while weaker global demand and depressed commodity prices will likely hammer the external sector. A risk of debt default further clouds the outlook. FocusEconomics panelists project GDP to contract 3.3% in 2020, which is down 0.9 percentage points from last month’s forecast. For 2021, the panel sees GDP growth at 1.6%.

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 %)  
Industrial Production (annual variation in %)  
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 %)
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Exchange Rate (vs USD)11.009.9310.0111.9414.09
Policy Interest Rate (%)15.5015.5010.259.7511.50
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)
Exports (USD billion)
Imports (USD billion)
Exports (annual variation in %)-28.0-
Imports (annual variation in %)-16.0-12.515.217.4-23.7
International Reserves (USD)

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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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