Country Risk Service Zambia Updater
The Economist Intelligence Unit, March 2013, Pages: 19
The president, Michael Sata, and his party, the Patriotic Front (PF), will remain in power at least until the next elections in 2016. The Economist Intelligence Unit's central scenario is that macroeconomic stability will be maintained and the policy stance will stay largely pragmatic, but there are risks to this. The fiscal deficit is forecast to narrow in 2014-15 as the government restricts spending growth to keep the debt stock in check. We forecast real GDP growth at 6.8% in 2013 as maize and copper output recover, an average of 8.1% in 2014-16 as various large mining projects come on stream, and 5.5% in 2017 as the copper boom winds down. Services and agriculture are expected to grow robustly throughout 2013-17. Our forecasts allow for delays in the various ongoing copper projects, and growth would be higher if they were completed on time. Conversely, it would be lower than forecast in the event of drought, a rise in the frequency of strikes or a failure by the government to maintain a broadly pragmatic policy stance.
The government is working towards lifting the immunity from prosecution enjoyed by the former president, Rupiah Banda, in order to press corruption charges against him, but is unlikely to succeed as it lacks the requisite parliamentary majority.
The operating licence of the Chinese-owned Collum coal mine has been revoked on the grounds that its owners have violated environmental and safety laws and failed to pay mineral royalties. The lack of clarity about whether and how the mine's owners have been compensated will cement unease about the policy agenda.
Country Risk Service Zambia Updater
Zambia at a glance: 2013-17
OVERVIEW
Key changes from last month
Political outlook
Economic policy outlook
Economic forecast
Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Rating definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk
Central scenario for 2013-17: Political stability
Central scenario for 2013-17: Election watch
Central scenario for 2013-17: International relations
Central scenario for 2013-17: Policy trends
Central scenario for 2013-17: Fiscal policy
Central scenario for 2013-17: Monetary policy
Central scenario for 2013-17: Economic growth
Central scenario for 2013-17: Inflation
Central scenario for 2013-17: Exchange rates
Central scenario for 2013-17: External sector
Key risk indicators
Ratings summary
Quarterly indicators
International assumptions summary
Economic structure
Public finances
Exchange rates, interest rates and prices
Financial sector
Current account
International liquidity
Foreign payment and liquidity indicators
External trade
External financing requirement
External debt stock
External debt service
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