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Zambia needs to weather economic storm – IMF

KALONDE NYATI, Washington
AS THE world economies continue slowing down due to global challenges, exporting countries like Zambia need to develop strategies that will sustain growth.
International Monetary Fund (IMF) chief economist Maurice Obstfeld says with global growth “at an increasingly disappointing pace”, weak export earnings from commodities are weighing down the economies of emerging markets.
Mr Obstfeld said at a World Economic Outlook press conference on Tuesday that countries like Zambia need to diversify their export bases to mitigate against global economic shocks.
The IMF has also pledged its commitment to support member states through capital assistance to navigate the economic turmoil.
The new World Economic Outlook anticipates a slight acceleration in growth from 3.1 percent to 3.2 percent with Zambia’s growth remaining subdued at 3.4 percent from 3.6 percent recorded last year owing to power outages and downward pressure from low copper prices.
He said policymakers should prepare for possible adverse outcomes by reinforcing fiscal and structural policy packages.
“The current diminished outlook calls for an immediate proactive response. There is no longer room for error …We propose a three-prolonged policy approach based on monetary, fiscal and structural policies,” he said.
Mr Obstfeld also said continuing co-operation to improve both the functioning of the international monetary system and stability of international finance are important for global economic resilience.
He said the IMF will, therefore, stand ready to support any country that requires assistance.
On the slow economic growth Zambia and other countries are facing, Minister of Finance Alexander Chikwanda said the country needs to reorganise itself if it is to weather the storm.
“We need to think anew to weather the storm…we need to talk and walk diversification,” he said.
Mr Chikwanda said Government will remain committed in ensuring prudent fiscal and monetary policies to cushion economic shocks.
On the regional front, South Africa’s, growth is expected to be halved to 0.6 percentage point in 2016 owing to lower export prices, elevated policy uncertainty and tighter monetary and fiscal policy.
However, Ghana’s growth is projected to increase from 3.5 percent last year – when it was hampered by power shortages and fiscal consolidation – to 4.5 percent this year.

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