International Monetary Fund staff concludes Zambia visit and cuts 2025 growth forecast to 4.5% while warning of emerging fiscal pressures

The International Monetary Fund published an end-of-mission statement following a staff visit to Zambia, noting substantial progress in restoring macroeconomic stability under the recently completed IMF-supported program but highlighting a weaker near-term growth outlook and signs of rising fiscal pressures. The statement reflects IMF staff views and will not result in an Executive Board discussion. Public external debt has been largely restructured, international reserves have strengthened, and inflation has continued to decline, recently reaching the Bank of Zambia’s target band. IMF staff revised 2025 growth down to 4.5% on weaker mining output, softer wholesale trade, and energy-related constraints, and projected 2026 growth of 5.5% as agricultural output normalizes after a bumper harvest. On fiscal policy, early slippage risks were linked to wage bill pressures, agricultural support, and election-related spending, with the 2026 primary surplus projected to fall by about 1 percentage point of GDP relative to the 3.8% of GDP envisaged at the last review under the ECF-supported program absent corrective measures; the scale and financing of Food Reserve Agency operations was flagged as a potential source of quasi-fiscal risks. The authorities reiterated interest in a successor arrangement with the IMF. Initial technical discussions could begin as early as late April, with further engagement expected to resume after general elections later this year once a new government is in place.