Beating the Slowdown in Zambia: Reducing Fiscal Vulnerabilities for Economic Recovery

doi:10.1596/25270

Publication:
Beating the Slowdown in Zambia: Reducing Fiscal Vulnerabilities for Economic Recovery

dc.contributor.author	Smith, Gregory
dc.contributor.author	Davies, Fiona
dc.contributor.author	Chinzara, Zivanemoyo
dc.date.accessioned	2016-10-25T22:04:18Z
dc.date.available	2016-10-25T22:04:18Z
dc.date.issued	2016-09
dc.description.abstract	Policy makers in commodity-exporting countries have faced increasing challenges in the past two years, in the face of reduced demand from China and uncertain economic recovery in developed economies. Zambia is no exception. Falling copper prices and a power crisis have contributed to an economic slowdown. The effects of the slowdown could arguably have been counteracted in a sustainable manner by utilizing fiscal buffers, but this option was not available, as Zambia did not make savings or provide for stabilization measures when the economy was prospering. Furthermore, options to access external financing are limited, as Zambia’s debt levels have soared in recent years following repeat non-concessional borrowing, making it more difficult and expensive to borrow from international debt markets. This policy note examines Zambia’s fiscal vulnerabilities and the costs associated with its expansionary, subsidy-oriented fiscal policy. It then sets out the benefits of coordinating fiscal policy with monetary policy in a way that is mutually reinforcing and beneficial to private sector investment, instead of having the two pull in opposite directions, as is currently the case. Finally, it makes recommendations to help shift the fiscal position to a more sustainable path and in turn improve market confidence and the prospects for sustainable economic recovery.	en
dc.identifier	http://documents.worldbank.org/curated/en/2016/09/26827932/beating-slowdown-zambia-reducing-fiscal-vulnerabilities-economic-recovery
dc.identifier.doi	10.1596/25270
dc.identifier.uri	https://hdl.handle.net/10986/25270
dc.language	English
dc.language.iso	en_US
dc.publisher	World Bank, Washington, DC
dc.rights	CC BY 3.0 IGO
dc.rights.holder	World Bank
dc.rights.uri	http://creativecommons.org/licenses/by/3.0/igo/
dc.subject	fiscal risk
dc.subject	fiscal policy
dc.subject	economic growth
dc.subject	economic shocks
dc.subject	monetary policy
dc.subject	economic recovery
dc.title	Beating the Slowdown in Zambia	en
dc.title.subtitle	Reducing Fiscal Vulnerabilities for Economic Recovery	en
dc.type	Working Paper	en
dc.type	Document de travail	fr
dc.type	Documento de trabajo	es
dspace.entity.type	Publication
okr.crossref.title	Beating the Slowdown in Zambia
okr.date.disclosure	2016-09-30
okr.doctype	Economic & Sector Work
okr.doctype	Economic & Sector Work::Policy Note
okr.docurl	http://documents.worldbank.org/curated/en/2016/09/26827932/beating-slowdown-zambia-reducing-fiscal-vulnerabilities-economic-recovery
okr.guid	858561475214134326
okr.identifier.doi	10.1596/25270
okr.identifier.externaldocumentum	090224b0845d8937_1_0
okr.identifier.internaldocumentum	26827932
okr.identifier.report	108615
okr.imported	true
okr.language.supported	en
okr.pdfurl	http://documents.worldbank.org/curated/en/858561475214134326/pdf/108615-WP-P157243-PUBLIC.pdf	en
okr.region.administrative	Africa
okr.region.country	Zambia
okr.theme	Economic management :: Analysis of economic growth
okr.theme	Economic management :: Macroeconomic management
okr.theme	Economic management :: Economic statistics, modeling and forecasting
okr.topic	Macroeconomics and Economic Growth::Fiscal & Monetary Policy
okr.topic	Macroeconomics and Economic Growth::Economic Conditions and Volatility
okr.topic	Macroeconomics and Economic Growth::Economic Stabilization
okr.topic	Macroeconomics and Economic Growth::Economic Forecasting
okr.unit	GMF - Southern Africa and Debt (GMF13)