ECONOMIC growth in emerging market and developing economies like Zambia’s slowed down to 4.4 percent in 2014 from 4.7 percent in 2013, largely on account of low domestic demand and reduced investment, says the Bank of Zambia (BoZ)
BoZ says growth in the Sub-Saharan Africa region is also estimated to have slowed down to 4.8 percent from 5.2 percent over the same period.
In the fourth quarter of 2014, commodity prices continued to decline sharply underpinned by lower growth rates in emerging markets, especially China.
As a result average crude oil prices declined by 25.1% during the fourth quarter to US$75.2 per barrel from US $100.4 per barrel recorded during the third quar ter of 2014. At its Monetary Policy Committee (MPC) meeting on Wednesday, the Bank of Zambia reported growth in 2014 was mainly driven by developments in advanced economies, which as a region grew by 1.8 percent from 1.3 percent in 2013. The global economic recovery has remained fragile and uneven, with implications for the Zambian economy through developments in commodity price trends and global trade and financial flows.
It says that according to the Januar y 2015 IMF World Economic Outlook estimates, the global economy grew by 3.3 percent in 2014 and is expected to expand to 3.5 percent in 2015. In the advanced economies, growth was largely attributed to the United States, which grew by 2.4 per cent from 2.2 percent in 2013. In January 2015, crude oil prices continued to decline and averaged US$49.0 per barrel.
Copper prices were also on a downward trend during the last quarter of 2014, declining by 6.1per cent to an average of US$6,572.5 per metric tonne from US $6,996 per metric tonne in the third quarter.
At the beginning of 2015, copper prices have continued to decline, and averaged US $5,803.6 per metric tonne in January.
The central bank in its reviews says in addition to the decline in commodity prices, there has been an overall strengthening in the US dollar, reflecting a flight to safety by investors as well as the brighter prospects for economic growth in the United States of