afrol News, 18 November - The Lusaka government is expecting a solid economic growth in 2003, which will be the third year in a row. The reasons for the continued economic growth in Zambia are said to be an improved control of public expenditure, favourable copper prices and a growth of the export sector.

A staff team from the International Monetary Fund (IMF) recently visited Lusaka to conduct economic policy discussions with the government of Zambia and review recent economic tendencies. The Zambian government and the IMF mission yesterday evening issued a joint statement, summing up the conclusions of the talks. Zambia's economic outlook was positive, it had turned out.

Real GDP growth in 2003 was estimated to reach 4.2 percent, "aided by strong growth in agriculture, manufacturing and construction," the IMF mission and the Zambian government had concluded.

Zambia only recently started to experience an economic revival, which has lifted real growth to an average of 4 percent per year in the last three years after decades of decline.

According to an earlier IMF assessment, "Zambia's overall economic performance has strengthened since mid-2000 after two decades of high inflation and low economic growth, reflecting sharply improved fiscal and monetary policies and progress in structural reforms." The government has in particular taken measures to strengthen the control of public expenditure.

There were however observed certain setbacks in the economic development of Zambia this year. Inflation had been "somewhat higher than expected," partly because of firmer food prices, and is now projected to be 17 percent at the end of 2003, compared with the target of 13 percent.

According to the assessment, higher copper prices and continued growth of non-traditional exports had contributed to an improvement in Zambia's external position. The current account deficit was now expected to narrow to 6.2 percent of GDP in 2003 and the Bank of Zambia's international reserve position was stronger than earlier expected.

A central focus of the macroeconomic discussions between the IMF team and the Zambian government was on "the need to contain the growth of government's domestic debt and the resulting pressures on domestic interest rates," according to the statement. The government and the IMF team had agreed that available fiscal resources would not be sufficient to meet public expenditures.

The IMF representatives had also discussed details of Zambia's 2004 budget, the statement indicated. The IMF team had urged the government to keep expenditure at a lowest possible level, "while protecting priority social spending." There was further set an aim to limit government's domestic borrowing.

Zambia has adhered to IMF and World Bank economic prescriptions for a long time. Critics of the IMF hold that the continuous rise of poverty in Zambia have demonstrated that these economic policies do not work. Others however hold that Zambia only after year 2000 has adhered to core IMF prescriptions, which now are showing results.

By staff writer

© afrol News

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