IMF forecast 2.3% economic growth

International Monetary Fund (IMF) anticipates the local economy growth in 2024 to be pegged at 2.3 percent, while inflation pressures persist driven by external supply factors and the depreciation of the exchange rate.

The announcement comes after visit led by Vera Martin visited Lusaka recently, to discuss economic and financial policies that could underpin the approval of the Third Review under the Extended Credit Facility (ECF)-supported arrangement.

According to IMF reform efforts will continue to focus on sustaining macroeconomic stability and restoring fiscal and debt sustainability, while addressing the humanitarian relief required by the drought.

“The Zambian authorities and IMF staff advanced the technical work as part of their discussions for the Third Review under the Extended Credit Facility. Discussions focused on analyzing recent economic developments and assessing the economic impact of the drought.

“There was agreement between the IMF staff and the Zambian authorities on the need to durably sustain macroeconomic stability and restore fiscal and debt sustainability in line with program parameters. Against continued uncertainty, agile policymaking will be paramount to respond to the impact of the drought while maintaining external buffers, “ Martin said.

Martin further highlighted that the Zambian authorities have made commendable progress in implementing crucial reforms under the Fund-supported program, including significant fiscal efforts in 2023 despite lower mining revenues.

“Despite the consolidation, authorities have upscaled social spending to support the most vulnerable and continue to provide free primary education. Near-term reform priorities should focus on permanent revenue measures and better cash and liability management that would reduce the financing needs crucial to restore fiscal space and debt sustainability.

In addition, strengthening tax administration, removing tax exemptions, and actively combating tax evasion can also boost revenues and improve governance. Continued progress in enhancing transparency and advancing governance reforms, particularly within the energy sector, is essential.”

The IMF said discussions will continue virtually toward completion of the Third ECF review.

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