Bank of Zambia (BoZ) Denny Kalyalya observed that Zambia’s economic conditions during the second quarter of this year have worsened and prospects for growth are weak.
Addressing the media during a quarterly briefing in Lusaka yesterday, the Central Bank Governor attributed this to a substantial decline in consumer demands, wholesale and retail trading, noting that Zambia’s economy is projected to contract by 4.2 percent from earlier projections of 2.6 percent.
He said the sharp rise in the number of Covid-19 cases has had a negative impact on Zambia’s economy.
The Central Bank Chief also stated that credit to the private sector has slowed down to about 10.4 percent from around 19.5 owing to fears of high default rates by banks, however, noting that noted that despite the expansion of credit to government, the money supply has reduced in the economy.
Dr. Kalyalya said inflation is also projected to come down and hoped this will improve food supplies and help in mitigating the impact of Covid-19 on the economy.
Dr. Kalyalya further noted the need to adjust macroeconomic fundamentals and debt sustainability to achieve economic stability in the country.
On interest rate, BoZ has reduced the Monetary Policy Rate from 9.25 percent to 8 percent and the monetary Policy rate is expected to influence lending rates charged by commercial banks.
Dr Kalyalya said that the Monetary Policy Committee settled for the reduction to safeguard the financial stability of people’s lives owing to the impact of the pandemic.
Dr. Kalyalya said the 125 basis points reduction in monetary policy is expected to trigger a reduction in interest rates by banks.
Well what next? Numbers don’t lie
Way before covid 19 Ever since 2011 , all economic indicators have headed South , worse when lungu became president……every thing is negative.
Covid is a convenient excuse to cover the incompetence of lungu.
Despite spending billions , we challenge the PF rats to tell us a time when there was GDP , inflation or any other indicators perform well under lungu ????
We the normal Zambians who identified how utterly useless PF and Lungu are have been singing this song since PF took over so nothing new
Kalyaya has become the symbol of PF failure and face of Zambia’s current economic catastrophe ? The guy has totally lost it and his statement shows how much this fool is misleading us Zambians fir to to keep his political appointment.
How can a qualified economist say the food supply will increase as inflation comes down….this is nonsense. Supply of foodstuffs depends on production not on inflation! Is Kalyaya really still normal? The man is tired and we will certainly retire him when we form Govt and bring back his ex boss, Caleb Fundanga who is very sover.
As for Kalyaya should go now.
But Economic Association of Zambia said the opposite in Mwansabombwe. We were told the economy was doing fine! Which is which!!!
You have heard from the Central Bank Chief himself not some dull corrupt minister who thinks the economy has improved because he can afford to pit himself and his family on billboards.
INTEREST RATE REDUCTION 8% (MPR) : THE OTHER SIDE OF THE COIN
Here is a brief outlook: By all means a reduction in a major macro-economic driver is always welcome. In modern economics however the story has a double edged sword .So what does the cutting of interest rates by 125 basis points to 8% mean for Zambians in general? Lower interest rates make it cheaper to borrow. This tends to encourage spending and investment. This leads to higher aggregate demand and economic growth. This increase in Demand may also cause inflationary pressures. To most economists, the primary benefit of low interest rates is its simulative effect on economic activity. By reducing interest rates, governments can help spur business spending on capital goods—which also helps the economy’s long-term…
The cure for this problem of economic decline is on 12th August 2021.
Ba Edgar was at cheating ceremony for Youths, he said totally opposite to Kalyalya.
‘Dr. Kalyalya further noted the need to adjust macroeconomic fundamentals and debt sustainability to achieve economic stability in the country.’
Thats the message to Govt and it has been for about 7 years.
KAIZER wont comment because he doesn’t understand economics.
To tell someone what they already know is a waste of time. To tell someone something they do not know but do not need to know is showing off. To tell someone something that they do not know but need to know, that, is informing.
Economy will shrink by 4.2% from 2.6%, means that it will grow by 2.49%. Zambia’s economy is not big, therefore a fall from 2.6% to 2.5% is almost negligible. What these guys are trying to do is to use Covid 19 as a mitigating excuse for the long term poor management of the economy over 9 years! Covid came late to the party and found them already drunk. The economy was going to grow by $624 million but now it will grow by 598 million which is $26.4 million less. The economy will lose 26 fire tenders ONLY.
Thanks for putting the figures out there. It’s time to tighten our belts and ride the tide. Zambia has been through worse economic plunges in the past but still recovered in one way or another. Not all hope is lost, unless people choose to give up. Hopefully when the Covid situation gets better businesses will rise to the occasion and push harder without dropping the ball.
Diaspora lady, the only reason we are in this mess is because of the PF. We already did the tightening of the belts under MMD until they gave us an economy that was registering continuous growth. Then the clueless PF came in, destroyed the economic foundations they found and proceeded to plunder the treasury and dump us in a debt trap. This government has recorded negative economic growth from the time it took over so am not sure what you are trying to sugarcoat. The solution is the removal of this sick party from power. We need people who understand the economy. Chapwa.
Thanks Dude love. True reflection of events and supported by 17 million Zambians. We need another driver, we are worse off, and these PF chaps should not even namizila covid, this situation of messing up the economy came way before covid.
@Saint… it was projected to shrink by 2.6%, but now it will shrink by 4.2%.
Ba KZ what do you have to say you don’t know economics ka guessed so blank numbers don’t lie.
PATRIOTIC WHAT CAN THAT TIN DUNDERHEAD EVER SAY?THOSE KZ AND FRIENDS MAKE NOISE WITHOUT ANY OBJECTIONS.UBUPUBA BWENKWABWENKA FWE.HE IS SO DULL BEYOND.
Lungu doesn’t want to hear that…Kalyalya’s job is on the line….just watch soon he will be replaced or fired
Zambia’s economic indicators have been heading south during Lungu’s entire tenure .That’s a sad fact we already knew .
As for Kalyalya I pity him responding to serve in a government that is through and through bent on making his work more and more difficult to forever brand him a failed centra bank governor for the poor performance of the Kwacha! He was a diasporan who chose to respond to the call to serve at home but with a top management team that had challenges he misinterpreted! Kalyalya is now in spotlight for fingers are pointing at him and messaging between his boss Lungu and himself are at variance. How do skilled Zambians in the diaspora come back home to contribute to national growth through participation if they won’t be listened to?
Have read through the comments there is one person missing who is ever present. They are two things involved either the language of economics is allien to him or is ashamed of how they have mismanaged the economy they found growing at 7% is now at 1.5
Finally someone from government honestly admitting that this government has failed. It is high time they called on former finance ministers magande and situmbeko to assist. The dollar has already started sliding again to reach K20 since these guys have no clue on what to do.
Kaizer was only selling government panadol at Cheston clinic. Kaizer crookedness come from far, entered Zambia illegally young with his parents and sold tablets while working at a clinic. Bizzare, found himself in politics as a ‘chola’ boy with late president Sata but dismissed when discovered was a crook as he dared crossing Sata. So, Economics! KZ will think is being insulted and begin pointing a gun to people randomly.
Dunderhead Kaizar Zulu has gone into hiding as expected…dull chap spending 24/7 on Lusaka Times blah blah blah blah empty head makaka
Kwacha closed at 19.12 yesterday from previous day close of 18.43, almost 4%declline in one day. Wha next?
The brainless PF blogger going by the name “Kaizer Zulu” is surprisingly missing today.
The bank governor has laid down the stark truth about Zambias economy.However, the decline has been there from the time PF came to power.Dont blame covid-19.
VIVA LUNGU 2021 IS 100% YOURS,HOUMBLE AND CARING PRESIDENT ,EVACUATED A YOUNG LADY WHO HAD A TUMA TO UTH FOR FREE ,EMPOERED THE GARDER POORMAN WITH LAND IN LIVINGSTONE ALL THESE HAPPENED A WEEK ,SURE MUZITASHA !!!!!!!!!!!!!!!
Before PF came into power did you see Teachers driving not even the headmaster,did you see Nurses driving not at all,did you see Police officers driving far from it ,see how people have built lets give credit where its due.am sure as you read this you are purely convinced that you bought that car you are driving during PF TIME and that house and plot you have its in PF be honest .APPRECIATE
Ever since Lungu came in power we as a country have been struggling economically… The only solution to better our economy is simply to change the government..
Your predictions have come to pass?