Economy remained resilient in 2018, claims Mwanakatwe
By Staff Reporter
FINANCE minister Margaret Mwanakatwe says economic performance in 2018 remained was generally resilient.
Mwanakatwe said the performance was supported by relative macroeconomic stability as well as less volatile commodity prices particularly for copper.
In her end of year statement on the performance of the economy, Mwanakatwe said this notwithstanding, several downside risks to the economic performance were encountered which included continued global trade tension and rise in global oil prices.
She said on the domestic front, negative market sentiment related to fiscal challenges; upward adjusted debt; sluggish credit growth; depreciation of the Kwacha from the third quarter which triggered inflationary pressures; and, lower than anticipated agriculture output arising from the poor rainfall, impacted on the overall performance of the economy.
“Growth in 2018 showed positive momentum with quarterly GDP trending upwards. Preliminary growth estimates indicated a pick-up in the third quarter to 5.0 % from 3.9% and 2.7 % in second and first quarters,” she said.
Mwanakatwe stated that the buoyant performance in mining, manufacturing and construction as well as stable supply of electricity aided the growth momentum in 2018.
She added that the annual growth is expected to remain robust around 4% albeit slower than year projection on account of poor performance of the agriculture sector as well as weak credit growth to the private sector and continued elevation in non-performing loans.
“Copper output in 2018 continued to increase with a total of 696,526 metric tonnes produced between January and October, compared with 654, 743 metric tonnes in the same period in 2017. The fairly high global copper prices which averaged US$ 6,598 and demand provided impetus for copper production,” she added.
“It is projected that annual copper output for 2018 will increase to over 800,000 Mt. Stable electricity supply also supported industrial production. In the last ten months of 2018 electricity generation increased by 12.6 % to 13.29 million Mwh from 11.86 million Mwh.”
On budget implementation, Mwanakatwe said budget execution in 2018 was broadly in line with annual target despite some fiscal challenges.
Mwanakatwe explained that revenues and grants collections between January and November were above target by 4.2%.
“The performance was mainly driven by improved compliance in VAT and corporate tax especially from mining sector. Expenditure was also above target by 2% mainly due to increase in interest payments on debt and spending on assets. Consequently, fiscal deficit outturn for the year is expected to be around 7%,” said Mwanakatwe.