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Economic growth impresses research centre

KELVIN CHONGO, Lusaka
THE Policy Monitoring and Research Centre (PMRC) is encouraged by the country’s improvements in the gross domestic product (GDP) because it indicates the economy’s resilience and bright outlook for 2017.
The Central Statistical Office (CSO) announced on Thursday the GDP for the first half of the year had posted a 4.0 percent growth.
Executive director Bernadette Deka said the improvements in GDP indicate that the Zambian economy is on the right track.
“In the 2017 budget address, government set the target of GDP growth at least 3.4 percent and an end of year inflation target of no more than 9.0 percent,” she said.
Ms Deka, however, said that GDP growth is already at 4.0 percent and that inflation is well below the 2016 target of nine percent as it is currently at 7.5 percent.
She said these economic conditions are conducive to accelerating government’s bid to achieve its 2017 targets of employment creation and economic diversification.
Ms Deka said the growth in GDP will ease the implementation of the 2017 budget as well as lead to sustained economic growth.
She cited improvements in the terms of trade and a stronger exchange rate as the other benefits if they are supported by sound fiscal and monetary policy.
“On December 29, 2016, the Central Statistical Office announced that year-on-year inflation recorded in December had reduced to 7.5 percent indicating a reduction by 1.3 percentage points,” she said.
Ms Deka said that the slowdown in the inflation rate has been attributed to the base effect.
She said a reduced inflation rate ultimately results in the improvement of the lives of ordinary Zambians.
Ms Deka said Zambia ends 2016 strongly by registering positive growth in the GDP recorded in the first half of the year.
“This growth has been attributed to the positive contributions of the information and communication industry, the construction industry, and the mining and quarrying industry. This is an indication of increased business activity within the economy and a strong show of faith by investors in the economy,” said Ms Deka.
And Ms Deka says PMRC acknowledges that a reduction in the inflation rate may not necessarily result in the reduction of food prices.
She said this does indicate that prices are increasing at a reduced rate and thus the general citizenry can benefit from the stability in commodity prices.

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