Wider Zambian budget deficit

LUSAKA – Zambia’s budget deficit will widen to 2,3 per cent of gross domestic product (GDP) in 2007 from 1,6 per cent this year while inflation will be sustained at 8,6 per cent, a senior Treasury official said on Thursday.

Secretary to the Treasury Evans Chibiliti also said in a preliminary report to parliament that the government planned to spend US$2,75 billion in its 2007 budget, mainly on improving the delivery of health, education and other social services. “In the medium term, the government shall focus on consolidating macroeconomic gains by maintaining macroeconomic stability,” Chibiliti said in a Treasury report outlining Zambia’s economic management plans between 2007 and 2009.The report will form the basis on which the government will present the 2007 budget.”The broad macroeconomic objectives are to achieve GDP growth of at least six per cent in the medium term,” he added.Zambia’s GDP growth was 5,1 per cent in 2005 while inflation was 15,9 per cent.Chibiliti said Zambia would maintain its budget deficit at 2,3 per cent of GDP between 2007 and 2009 while inflation, which is expected to decline to 8,6 per cent this year, would hold at the same rate in 2007 and fall to five per cent in 2008 and 2009.GDP growth was forecast to be sustained at an average six per cent between 2006 and 2009, he said.Chibiliti said the total budget would average US$2,75 billion between 2007 and 2008 and then rise to US$3 billion in 2009.Chibiliti said GDP growth would mainly be driven by copper mining, the country’s economic mainstay, as well as agriculture, tourism and construction, wholesale and trade.”In mining, the growth is mainly going to emanate from large scale mining due to opening up of new mines and anticipated relative high metal prices,” he added.Nampa-Reuters”In the medium term, the government shall focus on consolidating macroeconomic gains by maintaining macroeconomic stability,” Chibiliti said in a Treasury report outlining Zambia’s economic management plans between 2007 and 2009.The report will form the basis on which the government will present the 2007 budget.”The broad macroeconomic objectives are to achieve GDP growth of at least six per cent in the medium term,” he added.Zambia’s GDP growth was 5,1 per cent in 2005 while inflation was 15,9 per cent.Chibiliti said Zambia would maintain its budget deficit at 2,3 per cent of GDP between 2007 and 2009 while inflation, which is expected to decline to 8,6 per cent this year, would hold at the same rate in 2007 and fall to five per cent in 2008 and 2009.GDP growth was forecast to be sustained at an average six per cent between 2006 and 2009, he said.Chibiliti said the total budget would average US$2,75 billion between 2007 and 2008 and then rise to US$3 billion in 2009.Chibiliti said GDP growth would mainly be driven by copper mining, the country’s economic mainstay, as well as agriculture, tourism and construction, wholesale and trade.”In mining, the growth is mainly going to emanate from large scale mining due to opening up of new mines and anticipated relative high metal prices,” he added.Nampa-Reuters