IMF Project Zambia GDP to Grow 4% in 2017

Zambia gdp growth 2017 imf

The International Monetary Fund (IMF) projects that Zambia’s GDP growth will reach 4% in 2017, compared to 3% in 2016.

This will be achieved “[…] as the negative effect of the drought on electricity generation eases, new capacity comes on-stream, and some mining projects are expanded,” the IMF notes.

The projection was included in IMF’s latest regional economic outlook on Sub-Saharan Africa, published in October 2016.

Furthermore, the IMF indicates that inflation in Zambia is expected to moderate from 19% in 2016 to 9% in 2017 owing to base effects.

The base effect relates to inflation in the corresponding period of the previous year. If the price index rose at a high rate in the corresponding period of the previous year and recorded high inflation rate, a similar absolute increase in the price index now will show a lower inflation rate.

Zambia GDP and Inflation

Zambia’s GDP reached USD22b in 2015, USD27b in 2014, USD20.3b in 2010 and USD8.3b in 2005.

The recent slowdown in the country’s GDP growth is mainly due to low global copper prices that affect Zambia negatively since its economy is heavily mining-dependent, with copper accounting for 10% of GDP.

Earlier this year, the World Bank (WB) forecasted that Zambia’s GDP will grow at a rate of 4.2% in 2017 and 5% in 2018.

Zambia’s inflation increased from 7.7% in September 2015 to a peak of 22.9% in February 2016. After that, the country’s inflation rate decreased to 18.9% in September 2016 and 12.5% in October 2016.