Tue, 28 Feb 2017 11:03:48 +0000
By BUUMBA CHIMBULU
COPPER prices in the fourth quarter of 2016 rose by 10.5 percent, driven by a huge pick-up in the Chinese economy, the Bank of Zambia (BoZ) has said.
BoZ Governor Denny Kalyalya said the increase in the copper prices in the period under review was also as a result of plans for fiscal stimulus for infrastructure development in the United States. He was speaking at a media briefing in Lusaka recently during the announcement of the monetary policy rate which was reduced to 14.0 percent from 15.5 percent.
“Important also is that the Chinese economy is rebalancing, meaning that the way the Chinese economy has been operating infrastructure is changing to focusing now to consumer demand.
“Like the US economy was driven mostly by consumer demand, so this is what we are talking about the rebalancing of the Chinese economy. Right now copper prices are higher, around US$6, 000 per metric tonne,” he said.
Dr Kalyalya said the recovery in commodity prices for 2017, alongside the growth of the global economy at 3.4 percent, was a positive direction for the Zambian economy.
He said the global economy’s expected to growth by 3.4 percent this year and 3.6 percent in 2018 was as a result of the rebalancing of the Chinese economy and commodity recovery.
“This is driven by emerging markets and developing economies with recovery in commodity prices.
“For us, commodity price recovery is a double-edged sword, we are happy when copper prices are going up, when oil prices are going down, we are happy but the ones who export obviously are not happy so it is something we have to take in mind,” he said.
Dr Kalyalya also said crude oil prices in the fourth quarter of 2016 rose by 10 .4 percent on account of the agreement to reduce supply by oil producers.
