Lusaka - Zambia's fiscal deficit is expected to reach 8.5 percent of GDP this year, roughly double the budget target of 4.3 percent due to delays in scrapping a fuel subsidy and higher pay for government workers, the International Monetary Fund (IMF) said.
GDP growth in Africa's top copper producer was projected at 6 percent in 2013 from 7.2 percent in 2012 largely due to lower agricultural production, the IMF said.
“Government expenditures in 2013 will be significantly above budget,” the IMF said in a statement late on on Tuesday.
The IMF welcomed Zambia's plans to comprehensively address the fiscal challenges in the 2014 budget with a combination of stepped-up revenue collection and tight expenditure control, it said.
“The draft budget aims to bring the deficit to about 5 percent of GDP, similar to what was originally planned for 2013,” it said.
A further build up of reserves from the current level of less than three months of imports was needed in light of risks stemming from a potentially deteriorating external environment, it said. - Reuters