LUSAKA, June 29 (Reuters) - Zambia’s economy is expected to grow by 4.1 percent in 2017 and by close to 5 percent by 2019, the World Bank said on Thursday, but the global lender also warned that stricter spending controls were needed to ease the country’s large debt burden.
“The government has started to reduce the large stock of expenditure arrears but further efforts are needed to improve budgetary controls and better withstand fiscal pressures if the national debt is to remain at sustainable levels,” the bank said in a report.
Zambia’s external debt stood at $7.2 billion at the end of May, up from $6.86 billion at the end of last year.
“The cost of servicing debt now amounts to 20 percent of domestic revenue in 2017 from 8 percent in 2012. This leaves less resources for development priorities and poverty reduction,” the bank said.
Zambia had continued to have revenue shortfalls in the first half of 2017 and expenditure plans had not been moderated, it said, adding all sectors of the economy were expected to contribute to the forecasted growth of 4.1 percent in 2017.
Zambia is Africa’s second-biggest copper producer and agriculture is also a key economic sector. (Reporting by Chris Mfula; Editing by XXX XXX)