World Bank attributes Zambia’s debt pressure to fiscal deficit of 2015

World Bank attributes Zambia’s debt pressure to fiscal deficit of 2015

The World Bank has attributed the high debt pressure the Zambian economy is facing is due to the huge fiscal deficits of 2015.

World Bank Country Economist Gregory Smith says his bank has taken note that government’s overall external debt GDP ratios has significantly increased owing to the Eurobonds government issued and the rapid depreciation of the Kwacha last year.

Speaking at a media briefing this afternoon, Mr. Smith has also observed that given the slowdown in economic growth to about 3 percent, the Zambian government has been placed in a tight position.

Mr. Smith says the Zambian government has a lot of hard choices to make this year especially with the ambitious 2016 national budget.

He says 2016 for Zambia is therefore a very difficult year to predict as it is hard to know how the economy will run with large fiscal deficits.

And Mr. Smith says the World Bank projects that Zambia’s economy will start improving in the medium term somewhere around 2018.