ZANACO predicts downward performance of the economy

By Staff Reporter

ZANACO Bank Plc has lamented Zambia’s increasing debt levels will have a negative impact on the economy as government will not be able to finance other sectors of the economy.

And the bank has also predictated that the implementation of the goods and services tax (GST) will also impact on the country’s economy.

The bank also says Zambia’s economy is likely to record a positive growth of about 4.1% despite intensified risks arising from the fiscal challenges and the change in climate.

Speaking at the breakfast meeting in Lusaka yesterday, to review the economic performance of the country’s economy in the first quarter of 2019, Zanaco Bank Head of the Economic Research Dr. Patrick Chileshe said that the financial institution had projected a 4.1 percent economic growth for the year 2019.

Chileshe said that the projected figure was likely to drop as a result of the dry weather that might affect productivity being experienced in the country.

“Implementation of the goods and services tax will also impact on the country’s economy because firms in the country will not be able to claim the value added tax on inputs,” he said.

He said the adverse weather pattern being experienced in the southern parts of the country will negatively affect the Agro sector output for this year as most farmers will have a low yield.

“The adverse weather pattern will also affect the production of electricity, as water levels in the Kariba dam have continued to go down,” he said.
The bank further expects the volatility of the kwacha to be high especially in the second quarter of 2019 to about K13 to K14 if no policy measures are taken early by the government.