Au­gust PMI read­ings ex­pected be­tween 4 9.8-50.1…

Zambian Business Times - - FRONT PAGE -

Pri­vate sec­tor pulse for Au­gust as mea­sured by pur­chas­ing man­agers in­dex (PMI) is ex­pected to weaken, the Zam­bia Busi­ness Times car­ried in a note to its pre­mium sub­scribers. With the chal­lenges that the econ­omy has ex­pe­ri­enced in the spring month of Au­gust rang­ing from kwacha volatil­ity ef­fects from the strong dol­lar con­ta­gion, which Zam­bia has not spared, busi­ness ac­tiv­ity has been im­pacted to some ex­tent.

July PMI read­ings ac­cord­ing to Markit eco­nom­ics where 50.3 (a three month low) weighed by price in­fla­tion ef­fects. (Read­ings above 50 sig­nal in­creased pri­vate sec­tor ac­tiv­ity while those be­low 50 sig­nal as low down in busi­ness pulse)

The Zam­bia Busi­ness Times said Au­gust volatil­ity of the kwacha was higher than July and that cop­per plum­meted to 1- month lows fall­ing be­low USD5,965/mt amidst a global sell -off of risky as­sets as play­ers sought refuge in the in­ter­na­tional re­serve cur­rency the dol­lar.

Zam­bia recorded an 8.1% in­fla­tion breach­ing the BOZ target range of 6-8% (a 20 – month high). Up­side risks to in­fla­tion re­main fairly high from likely ex­tended dry spells ex­ac­er­bat­ing food in­fla­tion, higher crude prices at USD77.7 bbl. threat­en­ing pump prices and rand volatil­ity which could swell Zam­bia’s im­port bill.

“We ex­pect PMI read­ings of be­low 50.3 but noth­ing be­low 49.8, which is wor­ri­some. This should sig­nal the need for man­u­fac­tur­ing ca­pa­bil­i­ties to raise the ex­port base to weather the global storms’” Lead An­a­lyst said in a note.

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