ZAMBIA’S economy is expected to record a rebound in the short medium term next year due to interventions Government is implementing in reducing the strong headwinds, World Bank incoming director Ina Ruthernberg has said.
Ms Ruthernberg said much as the Zambian economy came under stress, the World Bank projected a rebound next year due to measures implemented by Government in the worst hit sectors such as energy.
Speaking at a media briefing in Lusaka, Ms Ruthernberg said the current measures such as working on reducing the power deficit would trigger the economy rebound.
“We think the picture for the Zambian economy in the medium term outlook is rosy. We see a rebound ahead and expect growth next year to stay on the higher level which is encouraging,” she said.
She also said the World Bank was expected to record a drop of below 4 percent in the economic growth this year.
Ms Ruthernberg explained that the drop would be triggered by the strong external and domestic pressure and that this would be the first time the band to record such decline since 1998.
“There have been external headwinds and domestic pressure so theses coming together have contributed to turbulent situation,
“In terms of economic growth, there are adjustments that have to be made from our side we expect a drop below four percent in this year and this is after 1998 so it’s a significant drop to observe,” she said. She further explained that the strong headwinds were as a result of low copper demand from China which had affected global economies.
“Under the domestic pressure, power crisis has triggered the drop of the economic growth because it impacts all sector of the economy, so this is a real challenge,” she said. Meanwhile, the banks senior economist Gregory Smith said 2016 would be tough for Government to match expenditure for the economy. Mr Smith also said Governments interventions to reduce power deficit by bringing new generational line would however trigger growth in the economy.
“I talked about domestic pressure and the headwinds and we need them to reduce if the economy to grow likes power where Government is working to reduce power deficit by bringing new generational line,
“Next year will be tough and we need to look it up in expenditure priority section in some areas to better match expenditure,” he said.