News of the Kwacha’s recent travails has been has been spreading thick and fast – it has lost 16.2% year to date closing at ZMK6.4 per $US yesterday. Zambia’s economy grew by 6.5% in 2013 with key drivers being: Transport, storage and communications (27.1%), construction (24%), community, social and personal services (17.4%), financial institutions and insurance (13.7%), manufacturing (8.2%), and mining (5%). This is despite a 7.4% drop in agricultural output (which is expected to increase in 2014). Inflation remained in single digits, closing the year at 7.1%. There was a merchandise trade surplus of US$1.4bn in 2013. Despite the recent fiscal deficit concerns and ratings/outlook downgrades, outlook for growth remains positive. So what’s behind the recent Kwacha slide?
Trying to decipher this puzzle that is Zambia by using a variety of publicly available data (structured and unstructured) in conjunction with my own skill/experience. * * *