Africa-Press – Zambia. Economist Trevor Maliwanda Simumba has submitted: GRZ has targeted to borrow K6.6 billion every month. With about 2/3 understated subscriptions they will start printing money in order to pay salaries. We are headed for a large recession and intolerable stagflation. I warned about this over 2 months ago “law of unintended consequences”.
We have squeezed money supply out of the economy to push for lower inflation and currency appreciation at the expense of the real economy. Every Zambian economic sector is operating below capacity with no end in sight.
Now we are claiming a phantom surplus in a Supplementary Budget! And this within a budget with a 10% fiscal deficit, no debt service payments and no payments to suppliers and contractors? Truly I am confused maybe my colleagues Trevor Hambayi and Grieve Chelwa can help me understand what is going on?
The supplementary budget is for the view to invoke quantitative easing. Economics is about timing. We are faced with the world recession in the offing.
BOZ has manipulated the currency to hurt exports and the figures are showing. You destroy activity and government cannot get investment eventually when the suffering started with the private sector. Currency is the first line of defense. You ignore the principle at your own peril.
We need Structural Transformation and stop manipulating the currency and inflation. Today the latest monthly inflation shows an increase to 9.9%. Reality is beginning to set in but the policy response is poor and ultimately the majority of Zambia’s poor will suffer the inevitable consequences.
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