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GDP Growth and Public Finance in Zambia: FY2019/20

[Dataset] GDP Growth and Public Finance in Zambia: FY2019/20

GDP Growth and Public Finance in Zambia: FY2019/20
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  • Last Updated Mar 19, 2020

[Dataset] GDP Growth and Public Finance in Zambia: FY2019/20

Zambia’s economy has been recovering due to improvements in copper prices and expansion of copper mining production. The Zambian mining industry went through a recession because of fluctuations in world commodity prices towards the end of 2014. Because copper exports constituted 69.9% of total exports in 2018 (2015-2017: 67.2%), the Zambian economy is susceptible to external shocks cause by the commodity price fluctuations. The price of copper declined by an annual average of -12.6% from USD 6863.4 per MT in 2014 to its lowest at USD 4867.9 per MT in 2016. As a result, export earnings declined and the Zambian Kwacha (ZMW) depreciated by an annual average of -19.1% from ZMW 6.2 per USD in 2014 to ZMW 10.3 per USD in 2016. Due to the ZMW depreciation, pass through inflation caused Zambian consumer price inflation to rise to its peak of 17.9% in 2016 which far exceeds the Bank of Zambia’s policy target band of 6.0% to 8.0%. Nevertheless, copper prices started recovering 2017 and copper production has increased which enabled a recovery in real gross domestic product (GDP) growth.

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