Zambia has cut its economic growth forecast for 2010 to 5.8 percent from 7 percent due to the possibility of a sluggish global economic recovery, Finance Minister Situmbeko Musokotwane said.
The government and Bank of Zambia are also aiming for inflation of 8 percent by the end of the year, Musokotwane said in a letter to the International Monetary Fund seen by Reuters on Monday. Annual inflation stood at 7.8 percent in June, slowing steadily from double-digit rises last year.
Despite the lower economic growth forecast, outlined in the June-dated letter, senior Treasury officials said growth was likely to come in above the new forecast.
“We revised the target downwards because of the global economic crisis but agriculture and mining have performed very well and we expect to grow the economy beyond 5.8 percent,” , Secretary to the treasury, told Reuters.
In the letter, Musokotwane said growth in Africa’s biggest copper producer would be driven mainly by new investments in mining, power generation, construction and agriculture.
“As agricultural output reverts to trend levels, real GDP growth is expected to fall marginally to 5.8 percent in 2010 before rising to 6 percent thereafter,” Musokotwane said.
“A number of large investments in the mining and energy sectors are expected over the medium-term.”
Musokotwane also said Zambia would start financing talks this year for the 600 megawatt Kafue Gorge Lower power project and the 120 MW Ithezi-Tezhi project. Both are expected to be completed by 2017.
Mines mothballed during last year’s global economic slump have reopened, while tourism may receive a boost in the wake of the soccer World Cup in South Africa.
Musokotwane said domestic revenues were expected to rise to 16.3 percent of GDP due partly to better tax collection and an increase in excise tax on diesel from 7 to 10 percent.
“Downside risks, however, still remain amidst uncertainties about a full-fledged global recovery in 2010 and rising oil prices,” Musokotwane said.
Musokotwane said the government would reduce its spending by 0.9 percentage points of GDP relative to 2009 to allow for more capital spending, which was expected to rise to 4.6 percent of GDP.
“The overall fiscal deficit is expected to remain at 2.5 percent of GDP, and domestic financing is expected to remain as programmed at 1.9 percent of GDP,” he said.
Musokotwane said the government’s spending plans were consistent with a year-end inflation target of 8 percent
[Reuters]
It is abundantly clear that Zambia does not have a specific set of economic indicators that it uses to measure economic growth or lack thereof. Dr. Stumbeko is inconsistent in his approach. He is mixing the income approach as well as the expenditure approach in the same projection. As he labors to deliberately confuse the untrained, he selects some principle elements and leaves others out. Who is fooling who?This cannot be totally blamed on the apparent miseducation of the LT reporter but largely the minister’s intent to construct giant smoking mirrors. I am surprised the economist at plot one does not see through the crap.
#1 you must have something against LT reporters. This is a reuters report check at the bottom. Am actually confused by what you are trying to say than what is in the report. You write like an LT reporter
#2, Do you have something against LT reporters? Check your last sentence.
English is such a contusing language. Ha!
No worries Mr Musokotwane, it makes no difference if you want you can put at 1% no one will even notice.
hahahahaha #4 Msana wanzili. you’ve made me laugh. u’ve summarised it nicely us laymen. am going home now. lol.
Great Job Finance Ministerm guess the drop in focus has been caused by Govt’s great travelling bills, drop in VISA fees, rise of dollar against Kwacha causing imports to be expensive, dunno what else.
Felix mutati for President. Musokotwane no ways. We dont want people who are busy changing Goal posts. they can change our country to china. Viva mutati.
Boo Musokotwane.
What kind of development can come from a batch of thieves and corrupt leaders who have ganged up to finish the little resources remaining in this poor country? Development was truely buried 2gether with Mwanawasa (MHSRIP) and Magande. See now Vision 2030 is dead. FNDP is dead. Now NO THEFT BY PUBLIC SERVANT. RB, Chiluba and gang of thieves free to rob this country. Ama I.D.I.O.T.S in charge
#8, Zemule, You must have a short memory if you can’t remember that Mwanawasa was being dismissed as a cabbage when he was in power. Of course he is dead now and a hero.
#8, Zemule, Sir and who is the politician of great integrity, you have in mind? Mr. Chilufya Sata? He has the worst political history in our country. If you believe in him, you must be the lowest simpleton the Post have yet manufactured from its editorials. Congratulations Post.
Our leaders have no backbone. The real problem Zambia has is that its leaders fear taking taxes from the mines. I can see them stuttering, shaking, sweating. Its a shame.
Check this: minewatchzambia.com if you’re Zambian and you wonder why we are poor. Its almost a cliche that Africa is being taken advantage of. And yet our leaders are always protecting them.
# 9 &10 (NKOLE WAMAPEMBWE UMFWE MILANDU) I did not mention Sata. I dont belong 2 yo useless political parties that are based on poverty. I work & stay in Japan. But dont behave as if u are a blind man. U are in ZED and u cant even see the nonsense going own with yo naked eyez? Shame on u
#9 & 10, in other words think before you bark!