World Bank drops Zambia's growth forecast for 2018, 2019

The World Bank said on Tuesday that Zambia’s economy is forecast to grow 4.1% in 2018 and 4.% percent next year, lower than previous projections by the lender, because of the expected impact of poor rains.

Zambia is heavily dependent on agriculture, much of it is maize grown by small-scale farmers who rely on rainfall as they lack irrigation.

“Our initial forecasts assumed that rainfall will be as good as the 2016-17 season. However this was not the case. The southern half of the country received poor rains,” said World Bank Zambia economist Zivanemoyo Chinzara.

“This is going to constrain 2018 and 2019 growth through lower agriculture yields and poor electricity generation. The inflationary impact of food prices could further restrain growth by weakening consumer demand.”

In an economic report in December last year, the World Bank forecast that Zambia’s economy would grow 4.3% in 2018 and 4.7% in 2019.

Hydropower makes up more than 90% of Zambia’s energy mix and most of the power generated is used by mining companies.

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