As the southern African country struggles to complete a lengthy debt restructuring, Treasury Secretary Felix Nkulukusa forecasted on Tuesday that Zambia’s economy would grow 4.2% in 2023, a decrease from the previous year’s growth.
Nkulukusa said in a statement that early figures indicate the economy would rise by 4.7% in 2022, up from 4.6% in 2021. Annual GDP growth is expected to be 4.8% in 2024 and 4.7% in 2025, according to forecasts.
Zambia has been unable to reach a debt relief plan with its lenders since the nation defaulted in 2020, despite leaders’ assertions that the delays were harming investment and pushing up inflation.
According to Nkulukusa, the central government’s foreign debt climbed by 1.0% to US $14.09 billion at the end of 2022, up from US $13.96 billion at the end of 2022. This boosted Zambia’s total public and publicly insured debt to $25.40 billion.
“The increase in debt stock was primarily due to disbursements from multilateral creditors for budget support and project loans,” he said.
The Zambian government intends to lower inflation to the central bank’s target range of 6-8% by the end of the year while keeping the budget deficit at no more than 7.7% of GDP.
In April, the year-over-year rate of inflation reached double digits for the first time since May 2022, rising to 10.2% from 9.9% in March.
