Washington: The International Monetary Fund (IMF) announced on Monday a staff-level agreement with Zambia for the fourth review of its loan program, paving the way for a $185.5 million disbursement to the Zambian government upon final approval by IMF management and its executive board.
This agreement follows an IMF mission visit to Zambia from Oct. 2-15, with further discussions taking place during the IMF and World Bank annual meetings in Washington, D.C. “The staff-level agreement reflects our commitment to support Zambia as it navigates current economic challenges,” the IMF stated.
Zambia’s economy has been severely impacted by prolonged drought, which has reduced agricultural productivity and led to widespread electricity shortages, affecting various sectors. The IMF now projects Zambia’s 2024 real GDP growth at 1.2%, a sharp decline from its June forecast of 2.3%. Inflation, largely driven by rising food costs and currency depreciation, surged to 15.7% in October, significantly exceeding the target band of 6-8%.
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The IMF emphasized that the upcoming disbursement will help stabilize Zambia’s economy as it grapples with these challenges, providing essential support for recovery efforts.
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