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‘UNCERTAINTY OVER IMF DEAL A HANDICAP’

By BUUMBA CHIMBULU

UNCERTAINTIES surrounding the conclusion of discussions between Government and the International Monetary Fund (IMF) remains a handicap to a better economic outlook in the second half of the year.

This is over a possible Extended Credit Facility Programme, according to the Centre for Trade Policy and Development (CTPD) Researcher Mataa Wakumelo.

Mr Wakumelo indicated that addressing the economic impact of the Covid-19 pandemic and concluding a formal programme with the IMF would be catalysts to a speedy economic rebound.

“The recent change of Government following the general elections may have an impact on the prospects of an IMF deal in the medium term.

“Concluding a formal programme with the IMF will be key to ensuring a successful debt restructuring process for Zambia. The debt position has worsened, as both domestic and external debt have increased,” he said in Lusaka during the launch of the CTPD Mid-Year State of the Economic Brief.

Mr Wakumelo said increased public and investor confidence following the transition in political leadership presented a scope for a more stable macro-economic outlook going forward.

He however warned that while increased investor confidence could attract investors, it was actual policy implementation that would make them stay.

Therefore, he explained, a more sustainable economic recovery path largely depended on how quickly the new administration settled down and began its policy implementation.

“It will be cardinal for the new administration to quickly review the Economic Recovery Programme launched by the previous administration so that it reflects the current Government’s economic recovery strategy, without completely shifting the thrust of the document,” he said.

On global economic growth, Mr Wakumelo indicated that prospects were expected to support domestic economic growth closer to the 1.8 percent target by end of 2021.

 “However, in the medium-term, growth prospects remain uncertain in view of the new and more contagious variant of the corona virus,” he stated.

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