The Economic Association of Zambia (EAZ) anticipates a reduction in the country’s GDP for 2015 owing to internal shocks ravaging the economy.
EAZ President Chrispin Mphuka has cited the 2015 national budget deficit, the hike in fuel pump prices and the power deficit as the internal factors having a bearing on the economy.
Dr Mphuka said that given the current load shedding in the country, his association foresees the projected end year GDP being lower than what has been projected after the midyear revision of the 2015
Dr. Mphuka says his association further anticipates the hike in the fuel pump price to trigger an increase in the price of other commodities and thereby inducing an upsurge in the country’s inflation rate.
He said that the budget deficit may also mean that Zambia is bound to have a huge external debt which will also have its own negative impact.
Dr Mphuka explained that having a huge external debt will either impact negatively on repayment and the subsequent national budget or impact the economy as government tries to cover up on the deficit by increasing domestic taxes and other revenue sources.
He advised government to ensure that it maintains a stable inflation rate and a stable exchange rate as these are the areas where economic stability is assessed.