Lusaka (Reuters) – Zambia plans to trim its fiscal deficit to 6.1 percent of GDP in 2018 from 7 percent this year, Finance Minister Felix Mutati said in a budget speech on Friday.
Presenting the 71.6 billion kwacha ($7.4 billion) budget for 2018 to parliament, Mutati said the economy of Africa’s No.2 copper producer should grow by at least 5 percent in 2018 from an estimated 4.3 percent this year.
Inflation would be maintained in single digits in the range of 6 to 8 percent, he said.
Mutati said 49.1 billion kwacha, or 68.5 percent of the budget, will be financed using domestic revenues and 2.4 billion kwacha or 3.4 percent by grants from various donors, Mutati said.
The balance would be financed through domestic and external borrowing.
The government will resume talks next month with the International Monetary Fund (IMF) for a possible aid programme, he said.
The IMF said in June it might grant Zambia up to $1.3 billion in a three-year credit facility to help plug the budget deficit.
But it said Zambia needed to take concrete steps to achieve fiscal consolidation targets outlined in the 2017 budget, which include improving revenue collection, limiting borrowing and scaling back on new capital projects.
($=9.63 kwacha)
(Reporting by Chris Mfula; Editing by Ed Stoddard and John Stonestreet)
