Economy is on the right track, BOZ Governor
The Bank of Zambia, BOZ, says the country’s economy has sustained its impressive performance in the past few years.
BOZ Governor Caleb Fundanga says this is reflected in a positive growth in real Gross Domestic Product (GDP), low inflation, falling lending rates and relatively stable and competitive exchange rates.
He said this when he officiated at a two day Sixth Bank of Zambia seminar for members of parliament held at Mulungushi International Conference Centre in Lusaka today.
Dr. Fundanga said last year Zambia’s economy registered a positive growth of 5.8% in real GDP which marked the fourth consecutive year that the economy had registered growth of at least 5%.
He said the key sectors driving the economy’s growth were mining, agriculture, manufacturing, transport and communications, and financial intermediaries.
The Central Bank Governor added that the good economic performance in 2006 was further reflected in the fall in inflation from 15.9% in December 2005 to 8.2% at the end of 2006. He however said inflation edged up to 9.8%, 12.6% and 12.7% in January, February and March 2007, respectively, due to inflationary pressures arising from higher prices of most non-food inflationary items.
Dr. Fundanga said BOZ anticipates inflationary pressures to subside in the coming months owing to continued implementation of appropriate monetary and fiscal policies coupled with the expected fall in food prices.
He added that the kwacha registered self correction by 21% compared to an appreciation of 26.4% in 2005 and has since stabilised.
He said this is a development that should enhance competitiveness of the country’s exports, particularly the non-traditional exports.
Dr. Fundanga pointed out that the desire of government is to enhance the economic and social achievements of 2006 through its macroeconomic objectives for 2007 which include reducing inflation to 5%, achieving a real GDP growth rate of 7%, reducing the government domestic borrowing to 1.2% of GDP and raising gross international reserves to at least 2.5 months of import cover.
He said the attainment of the desired economic benchmarks will require the input and participation of all stakeholders. ZANIS