Maravi

Fundanga predicts continued economic growth

Fundanga predicts continued economic growth
By Chiwoyu Sinyangwe
Thu 28 July 2011, 13:59 CAT

BANK of Zambia governor Dr Caleb Fundanga says the reclassification of Zambia as a lower middle income country and B+ rating will help to prop up the local capital market.

During the launch of the Central African Stock Exchange case handbook 2011 sponsored by BancABC, Dr Fundanga said Zambia’s performance was expected to remain positive, driven by strong copper output and favourable commodity prices.

The handbook details performances of stock exchanges of 110 companies in Zambia, Malawi and Zimbabwe. This is the first time the bourses in the three countries have been covered in a single publication.

Dr Fundanga said the macroeconomic environment was expected to remain favourable due to the projected strong external sector, the move he said would help to boost the performance of the Lusaka Stock Exchange.

“The recent B+ sovereign rating assigned to the country as well the reclassification of Zambia as a Lower Middle Income country reflects the country’s recent strong economic performance with GDP growth averaged six per cent over the last five years supported by low inflation and there is positive external sector performance,” Dr Fundanga said.

He said the favourable developments put the Zambian business and government in a good position to access finance for sustained economic growth and improved conditions of living for all citizens.

“In the medium to long term, the prospects for Zambia’s economy are bright,” he said.

“The robust GDP growth momentum is expected to be maintained premised on favourable growth performance in mining, agriculture, construction, tourism, manufacturing amongst other sectors. This will be supported by favourable commodity prices on the international market, government’s investments in infrastructure and expected increase in foreign direct investments.”

Dr Fundanga said inflation was expected to reduce owing to the current huge bumper maize harvest.

“The current growth we are enjoying is broad-based. In the past, we had growth which was just mostly concentrated on mining sector but today we see growth particularly strong in agriculture where the majority of our poor people live,” said Dr Fundanga.

“And if this continues, we expect that a lot more people are going to benefit from the growth we are enjoying and we will continue to enjoy.

Further, inflation is expected to remain in single digits owing to prudent macroeconomic policies and the bumper harvest recorded during the 2010/2011 harvest season which is expected to dampen any negative effects on overall inflation through the food component. Accordingly, interest rates are expected to decline further.”

Labels: CALEB FUNDANGA, GDP

posted by MrK @ 2:18 PM