Zambia Economy

Economy

Despite progress in privatization and budgetary reform, Zambia's economic growth remains somewhat below the 5% to 7% needed to reduce poverty significantly. Privatization of government-owned copper mines relieved the government from covering mammoth losses generated by the industry and greatly improved the chances for copper mining to return to profitability and spur economic growth. Copper output increased in 2004 and is expected to increase again in 2005, due to higher copper prices and the opening of new mines. The maize harvest was again good in 2004, helping boost GDP and agricultural exports. Cooperation continues with international bodies on programs to reduce poverty, including a new lending arrangement with the IMF in the second quarter, 2004. A tighter monetary policy will help cut inflation, but Zambia still has a serious problem with fiscal discipline.