Zambia has cut its lending rate owing to effects of the Coronavirus pandemic. Zambia’s Apex bank reduced the lending rate by 225 basis points to 9.25%
The bank forecast that gross domestic product (GDP) will shrink by 2.6% in 2020- its first economic contraction in more than 20 years. Despite debt and other issues the GDP grew by 1.9% in 2019.
Fiscal pressures are expected to heighten in 2020 as revenue performance is adversely affected by COVID-19, while spending to combat the virus rises.
Zambia has 832 COVID-19 cases and has recorded 7 deaths.
Before the coronavirus hit Africa’s second largest copper producer, power shortages had already hampered activity and growing public debt.