Zambia’s economic growth potential remains high – IMF

International Monetary Fund (IMF) Resident Representative Tobias Rasmussen says Zambia’s economic growth potential remains high, but that the medium-term outlook is clouded by domestic and external risks.

Speaking in Lusaka today during the presentation of the IMF regional Economic Outlook in Lusaka today, Mr. Rasmussen says the large fiscal deficit, lower copper prices and policy uncertainties have exerted significant pressures on the exchange rate and slowed growth.

Mr. Rasmussen says there is need for the country to address the country’s fiscal imbalances in order to maintain macroeconomic stability and ensure a strong foundation for sustained economic development.

He states that a marked tightening of monetary policy and a boost to international reserves from Eurobond proceeds helped to partially reverse the depreciation of the Kwacha and stabilize the exchange rate.

And Mr. Rasmussen has called on government to consider putting in place mitigation measures aimed at strengthening the Kwacha which has been sliding against major foreign currencies since October last year.

He says the loss of value which the Kwacha has recorded over the past few months has a negative effect on production and expansion of many sectors of the country’s economy.