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Instability in Zimbabwe and the civil war in the Democratic Republic of Congo (DRC) could jeopardise economic recovery in neighbouring Zambia, whose gross domestic product (GDP) growth is forecast to rise to 4.5 percent this year, Standard Chartered Bank was quoted as saying by 'The Financial Gazette'.
The bank said Zambia's real GDP growth was expected to rise from last year's 2.5 percent to 4.5 percent and that annual inflation would have declined to 16 percent by December this year versus last year's 20.6 percent. Standard Chartered said there was a risk that the forecast growth could be hindered by the DRC's civil war and the invasion of commercial farms and politically-motivated violence in Zimbabwe.
"Growth projections for the Southern African Development Community (SADC) region have been downgraded because of the cyclone damage and flooding, mostly in Mozambique but also in parts of South Africa, Botswana and Zimbabwe," the bank said in its quarterly publication Business Trends Zambia.
"More recently, the farm crisis in Zimbabwe has forced a radical downgrading of growth projections for that economy, with some adverse spin-off for the region as a whole."
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