LUSAKA (Reuters) – Economic growth in Zambia is expected to pick up this year to reflect strong growth in copper production and non-maize agriculture, the International Monetary fund (IMF) said on Tuesday.
The IMF projected an economic growth rate of 7.7 percent for Africa’s largest copper producer in 2012, up from projections of 7.4 percent sent to the finance minister’s office in June, and compared to a 6.5 percent growth estimate for 2011.
“Macro economic performance in 2011 was positive and is expected to remain robust this year,” the IMF said in a statement, adding Zambia’s expansionary budget which seeks to ramp up infrastructure should support growth.
The Washington-based organisation said inflation was likely to end the year at 6 percent, the same as in February when prices hit their lowest in at least a decade on lower food costs after a bumper maize crop.
Zambia has solid maize stocks and exports to other African countries, filling a gap for nations such as South Africa which has had to import white maize.
The organisation sounded a warning about the effect that a further deterioration of the global economy could have for copper prices and export demand.
However, Zambia should be cushioned from real shocks.
“Zambia’s solid macroeconomic management, the large investments in the copper sector and recent strong growth in non-maize agriculture all augur well for the country’s ability to withstand global shocks and sustain the growth momentum into the future,” the IMF said.
The organisation said despite the favourable macroeconomic signals, there was an urgent need to “re-orient policies to ensure economic growth and macroeconomic stability are accompanied by strong employment growth and poverty reduction.”
A Reuters poll of economists forecast growth at 6.6 percent this year and 6.9 percent in 2013.