STANDARD Chartered Bank says Zambia’s economic growth is expected to slow down and experience a bigger fiscal deficit this year due to weak global demand for copper.
In its daily briefing report, the bank says global commodity prices have dropped sharply on concerns that China’s economy was slowing after years of rapid development that has sucked in metal imports.
“Zambia’s economic growth is expected to be slower and a bigger fiscal deficit this year is expected as weak global demand for copper hits exports as evidenced by the documents released by the Ministry of Finance on Sunday,” it says
According to the statement by Treasury secretary Fredson Yamba the proposed 2016 to 2018 medium term expenditure framework, in the domestic economy, real GDP growth is projected at 5.0 percent in 2015 down from the projected target of 7.0 percent.”
The report further said copper export earnings dropped 29.9 percent to $2.6 billion in the six months through June, compared to the first half of 2014.
Zambia, which aimed for gross domestic product (GDP) growth of 6 percent, forecasts growth would return to its target in 2016, and rise to 6.5 percent in 2017 and 6.8 percent in 2018.
It sees its budget deficit exceeding its target of 4.6 percent of GDP this year, coming in at 5.5 percent in 2015 and 5.2 percent in 2016.
Recently the Ministry of Finance had asked parliament in June to almost double Zambia’s external borrowing limit to K60 billion ($7 billion) to finance its budget shortfall.