GLOBAL ECONOMY HEADS FOR RECESSION ….
THE CHIMBULU
global growth is ex- pected to go into recession this year, an outcome far at a subdued 1.2 percent in 2020.
worse than during the 2009 The IMF however stressed that
global financial crisis, the global growth was expected to re-
International Monetary bound to 5.8 percent in 2021, well
Fund (IMF) has said. above trend, reflecting the normal-
The IMF indicated that isation of economic activity from global growth was projected very low levels. It explained that the at –3.0 percent in 2020, but advanced economy group was fore- would rebound to 5.8 percent cast to grow at 4.5 percent, while in FINANCIAL 2021. Service Providers (FSPs) that growth for the emerging market will According borrow funds to the from World the K10 billion and developing economy group
stimulus package are expected to peg
Economic Outlook (WEO) was forecast at 6.6 percent.
interest rates on the money at no more than
released on Wednesday this It said the rebound in 2021 de-
17.5 percent, says the Bank of Zambia (BoZ).
week, the growth forecast was pended critically on the pandemic
is against the current interest rates marked prevailing down on the by market more which than are between 28 fading in the second half of 2020, six and percentage 30 percent. points rela- allowing containment efforts to be tive If FSPs to the borrow October funds 2019 at 12.5 and percent from gradually scaled back and restoring January BoZ and 2020 lend to update. clients at no more than 17.5 consumer and investor confidence. percent, The IMF then said they 2020 have growth access to more funds “Significant economic policy rate from for the the facility. group excluding actions have already been taken
This is contained in the BoZ said in its and any FSPs that fail to comply will be subject the Bank and this is in addition to the bank’s
China was marked down 5.8 across the world, focused on ac-
guidelines titled ‘The K10 Billion Stimulus to mandatory repayment. continuous surveillance through on-site and
percentage points relative to commodating public health care
Package. Frequently Asked Questions.’ “With regard to interest rates, the Bank has off-site inspections. the January WEO projection. requirements, appropriately while shall limiting result the
The Central Bank last month introduced a provided incentives for FSPs that offer lower “Failure to report
amplification guided under to section economic 14 and activity K10 It billion explained refinancing that facility adverse to enable FSPs interest rates to their clients,” BoZ said. in sanctions as confidence to support businesses effects were and likely households in the It indicated that BoZ had provided additional the imposition
and of such the financial sanctions system. is without to wake further of the weigh covid-19 on economic outbreak. incentives to FSPs which lend to their clients at prejudice to the “The Bank’s projected use of its recovery regulatory assumes prospects. BoZ said much as FSPs would determine the tightening no more in than global five percentage fi- IMF points said. above the powers as provided that these for in policy the Bank actions of Zambia are effec- interest “Among rates, emerging they were market obliged to nancial pass on conditions, the cost of and funds a plunge from the in Central IMF Bank. indicated that even Act and with Banking a tive and in preventing Financial Services widespread Act,” firm
The central bank said it would check on BoZ said. and benefits developing of lower economies, interest rates, all fixed commodity interest prices, which will have sharp rebound in the remainder of bankruptcies, extended job losses, rates and the possibility of a payment a severe holiday impact the on benefits economic being ac- passed the on year prior and to the sizable fiscal FSPs, support, said BoZ, were supposed to
countries face a health crisis, and system-wide financial strains,”
to their clients. disbursement of funds. demonstrate how the benefits obtained on the
severe external demand shock, tivity in commodity exporters,” the the economy was projected to grow the IMF said.
“The bank will regularly monitor performance “All FSP are subject to regular reporting to Facility are passed on to their clients.