Washington, DC –
An International Monetary Fund (IMF) staff team led by Dhaneshwar Ghura
held virtual meetings during June 22–July 10 to discuss the Government of
Zambia’s request for emergency support under the Rapid Credit Facility. The
discussions covered the authorities’ response to the
COVID-19 pandemic, recent economic developments, the economic outlook and
policies for 2020 and the medium-term.
At the conclusion of the virtual discussions, Mr. Ghura issued the
following statement:
“The social and macroeconomic impact of the COVID-19 shock, on top of a
severe drought last year, will be heavy. Growth is forecast at around ‑5
percent in 2020, substantially lower than envisaged at the beginning of the
year, and the number of people living in extreme poverty is expected to
increase. Fiscal pressures in 2020 have increased due to significantly
lower revenue collections and higher spending needs. Zambia has requested
support under the G20 Debt Service Standstill Initiative, which would
provide temporary fiscal space this year.
“Discussions covered both near- and medium-term policies to address these
challenges and the underlying macroeconomic vulnerabilities, including the
main elements of the revised 2020 Budget with a focus on spending for the
COVID-19 health, social and economic response. Discussions will continue as
the authorities determine their policies and priorities in the formulation
of the revised 2020 Budget, as well as the medium-term fiscal stance needed
to restore debt sustainability, revive growth and lower poverty.
“IMF staff held meetings with Finance Minister Bwalya Ng’andu, Bank of
Zambia Governor Denny Kalyalya, senior Government and Bank of Zambia
officials; and the private sector.
“Staff express their gratitude to the Zambian authorities for the
constructive discussions that were held and look forward to continuing
discussions.”
