Zambia expects budget deficit at 8.1 percent of GDP in 2016

Zambia’s economy is expected to tumble by 8.1 percent of gross domestic product from the target of 3.8 percent in 2016, said Alexander Chikwanda, the minister of Finance.

The expected deficit has underscored the impact of a plunge in the price of copper in the market that has been the country’s major export.

The finance minister reported to the parliament that the cabinet had given the government the green light to engage with the International Monetary Fund to impact on the country’s economy.

“The Government will do the necessary to contain the budget by around 3.9 percent and this will reduce the deficit by 3.0 percent. We are also in consultation with the International Monetary Fund on an economic program for 2016,” the minister reported to the parliament.

The country has also continued to experience low electricity production from the prolonged drought. The electricity deficit has risen to 1,000 megawatts from 700 megawatts in November.