{
  "title": "IMF Executive Board Concludes 2025 Article IV Consultation and Completes Fifth Review Under the Extended Credit Facility with Zambia",
  "publication": "IMF News, August 5, 2025",
  "sourceUrl": "https://www.imf.org/en/news/articles/2025/08/05/pr25276-imf-executive-board-concludes-2025-article-iv-con-and-completes-5th-review-ecf-zambia",
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  "summary": "On July 25, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation and fifth review of Zambia’s 38-month Extended Credit Facility (ECF) Arrangement, approved on August 31, 2022, and financing assurances review for Zambia.",
  "publishDate": "2025-08-05",
  "sections": [
    {
      "heading": "Overview",
      "content": "- On July 25, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation and fifth review of Zambia’s 38-month Extended Credit Facility (ECF) Arrangement, approved on August 31, 2022, and financing assurances review for Zambia.\n- Completion of this review allows for an immediate disbursement of SDR 139.88 million (about US$184 million), bringing Zambia’s total disbursement under the ECF-supported program to SDR 1132.74 million (about US$1.55 billion).\n- The ECF Arrangement seeks to entrench macroeconomic stability, restore debt and fiscal sustainability, enhance public governance, and foster inclusive growth to improve the livelihood of the Zambian people.\n- The authorities have consented to the publication of the Staff Report prepared for this consultation."
    },
    {
      "heading": "Program performance",
      "content": "- Performance status:\n  - All end-December 2024 quantitative targets met.\n  - Most end-March 2025 indicative targets met.\n  - Three end-March 2025 indicative targets missed: non-mining tax revenues, arrears clearance, and reserve accumulation.\n- Structural benchmarks (SBs) for this review:\n  - Six out of fourteen SBs met.\n  - Four SBs completed with delays.\n  - Four SBs (on debt office procedures, along with financial sector and governance reforms) proposed to be reset to the next review.\n- Prior actions and waivers:\n  - The recent adoption of an amended 2025 budget in line with program commitments satisfies the prior action set for this review.\n  - Executive Board granted a waiver for nonobservance of the continuous performance criterion on contracting non-concessional external debt in the fourth quarter of 2024."
    },
    {
      "heading": "Economic outlook and risks",
      "content": "- Growth:\n  - Real GDP growth estimated at 4 percent in 2024.\n  - Real GDP growth projected at 5.8 percent in 2025 and 6.4 percent in 2026, 6.5 percent in 2027.\n- Inflation:\n  - Headline inflation expected to decline to 11 percent by end-2025.\n  - Annual average inflation figures: 15.0 percent (2024), 14.2 percent (2025), 9.2 percent (2026), 7.4 percent (2027).\n  - End-of-year inflation figures: 16.7 percent (2024), 11.1 percent (2025), 7.9 percent (2026), 7.0 percent (2027).\n- Key drivers:\n  - Recovery supported by stronger mining and services performance and continued recovery in agricultural production following the historic drought.\n  - Electricity access prioritized to productive sectors.\n- Risks:\n  - Outlook subject to significant downside risks stemming from global uncertainty.\n  - Medium-term prospects depend on scaling up mining investment, sustained fiscal discipline, and structural reforms to promote private sector activity, economic diversification, and more inclusive growth."
    },
    {
      "heading": "Debt position and restructuring",
      "content": "- Public debt assessment:\n  - Zambia’s public debt is assessed as sustainable, but the country remains at high risk of overall and external debt distress.\n  - Although at high risk because of near-term breaches of the DSA thresholds, it is expected to reach a moderate risk of external debt distress over the medium term.\n- Restructuring progress:\n  - Authorities have reached agreements in principle with most external commercial creditors.\n  - Efforts ongoing to advance bilateral agreements with official bilateral creditors, in line with program parameters and comparability of treatment as defined by the Official Creditors Committee.\n  - Directors welcomed good progress on external commercial and official debt restructuring and encouraged prompt finalization of all restructuring agreements."
    },
    {
      "heading": "Executive Board Assessment — main policy advice and priorities",
      "content": "- Fiscal policy and revenue:\n  - Underscored importance of revenue-led fiscal consolidation to address fiscal and growth challenges.\n  - Welcomed new revenue measures and spending reprioritization in the revised 2025 budget.\n  - Called for intensified domestic revenue mobilization over the medium term to create space for priority social and capital spending while strengthening debt sustainability.\n  - Emphasized broadening the tax base and improving tax administration.\n  - Encouraged further strengthening of public financial management to improve efficiency, transparency, and credibility of fiscal operations.\n  - Emphasized the need for sustained budget discipline ahead of the 2026 elections.\n- Monetary and financial policy:\n  - Recommended the Bank of Zambia (BOZ) maintain an appropriately tight monetary-policy stance to combat inflation.\n  - Supported BOZ’s data-driven approach and urged strengthening monetary policy transmission to anchor inflation expectations.\n  - Supported efforts to strengthen liquidity operations, deepen financial markets, and underscored importance of reserve accumulation and sustained exchange rate flexibility to absorb external shocks.\n  - Encouraged further reforms to enhance financial stability and inclusion.\n- Structural and governance reforms:\n  - Stressed structural reforms to stimulate private sector activity and economic diversification: improve business environment, raise labor productivity, enable firm expansion, reform agricultural support mechanisms, address informality, infrastructure gaps, and limited access to finance.\n  - Underscored importance of strengthening governance, promptly adopting the new Anti-Corruption Act, and strengthening independence of the Anti-Corruption Commission.\n  - Reiterated calls for enhanced transparency in the energy sector and resource management."
    },
    {
      "heading": "Key statistics and selected economic indicators",
      "content": "- Population (millions, 2024): 21.1\n- Per capita GDP ($, 2024): 1,246\n- Quota (SDR millions, % total): 978.2\n- Poverty rate (2022): 64.3\n- Main products and exports: Copper\n- Key export markets: China\n\n- Output (Real GDP growth %):\n  - 2021: 6.2\n  - 2022: 5.2\n  - 2023: 5.4\n  - 2024 Est.: 4.0\n  - 2025 Proj.: 5.8\n  - 2026 Proj.: 6.4\n  - 2027 Proj.: 6.5\n\n- Prices (Inflation annual average %):\n  - 2021: 22.0\n  - 2022: 11.0\n  - 2023: 10.9\n  - 2024: 15.0\n  - 2025: 14.2\n  - 2026: 9.2\n  - 2027: 7.4\n\n- Central government finances (% GDP):\n  - Revenue: 2021: 22.4; 2022: 20.4; 2023: 21.9; 2024: 22.2; 2025: 22.8; 2026: 23.0; 2027: 23.3\n  - Expenditure: 2021: 30.5; 2022: 28.2; 2023: 27.4; 2024: 25.5; 2025: 28.0; 2026: 26.7; 2027: 24.9\n  - Fiscal balance (cash basis): 2021: -8.1; 2022: -7.8; 2023: -5.5; 2024: -3.3; 2025: -5.3; 2026: -3.7; 2027: -1.6\n  - Fiscal balance (commitment basis): 2021: -13.9; 2022: -5.4; 2023: -4.5; 2024: -1.9; 2025: -2.3; 2026: -2.1; 2027: -0.3\n  - Public debt (% GDP): 2021: 112.1; 2022: 110.9; 2023: 133.4; 2024: 123.9; 2025: 91.9; 2026: 79.0; 2027: 69.4\n\n- Money and Credit:\n  - Broad money (% change): 2021: 3.7; 2022: 24.5; 2023: 24.6; 2024: 19.1; 2025: 14.7; 2026: 13.6\n  - Credit to private sector (% change): 2021: 34.2; 2022: 41.3; 2023: 20.5; 2024: 52.1; 2025: 29.7; 2026: 12.7\n  - 3-month Treasury bill interest rate (%): 2021: 12.8; 2022: 9.6; 2023: 9.8; 2024: 10.1\n\n- Balance of payments:\n  - Current account (% GDP): 2021: 11.9; 2022: -3.0; 2023: -2.6; 2024: 1.3; 2025: 2.7\n  - FDI (% GDP): 2021: 3.1; 2022: 0.7; 2023: 1.8; 2024: 3.8; 2025: 4.5\n  - Reserves (in months of imports): 2021: 3.3; 2022: 3.4; 2023: 4.2; 2024: 4.4; 2025: 4.7\n\n- Exchange rate:\n  - REER (% change): 2021: 5.0; 2022: 30.3; 2023: -7.1; 2024: -13.3\n\nIMF Press Release No. 25/276, August 5, 2025.\n\n---\n\n\n References\n\n- PRESS CENTER\n- https://www.imf.org/en/Countries/ZMB\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/08/05/pr25276-imf-executive-board-concludes-2025-article-iv-con-and-completes-5th-review-ecf-zambia"
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    "Published: August 5, 2025",
    "On July 25, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation and fifth review of Zambia’s 38-month Extended Credit Facility (ECF) Arrangement, approved on August 31, 2022, and financing assurances review for Zambia.",
    "Completion of this review allows for an immediate disbursement of SDR 139.88 million (about US$184 million), bringing Zambia’s total disbursement under the ECF-supported program to SDR 1132.74 million (about US$1.55 billion).",
    "The ECF Arrangement seeks to entrench macroeconomic stability, restore debt and fiscal sustainability, enhance public governance, and foster inclusive growth to improve the livelihood of the Zambian people.",
    "The authorities have consented to the publication of the Staff Report prepared for this consultation.",
    "Performance status:",
    "Structural benchmarks (SBs) for this review:",
    "Prior actions and waivers:",
    "Growth:",
    "Inflation:",
    "Key drivers:",
    "Risks:",
    "Public debt assessment:",
    "Restructuring progress:",
    "Fiscal policy and revenue:",
    "Monetary and financial policy:",
    "Structural and governance reforms:",
    "Population (millions, 2024): 21.1",
    "Per capita GDP ($, 2024): 1,246",
    "Quota (SDR millions, % total): 978.2",
    "Poverty rate (2022): 64.3",
    "Main products and exports: Copper",
    "Key export markets: China",
    "Output (Real GDP growth %):",
    "Prices (Inflation annual average %):",
    "Central government finances (% GDP):",
    "Money and Credit:",
    "Balance of payments:",
    "Exchange rate:",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/Countries/ZMB](https://www.imf.org/en/Countries/ZMB)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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