PF will become increasingly unpopular – Economist Intelligence Unit

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President Lungu

The latest report of the Economist Intelligence Unit says the ruling Patriotic Front (PF) will become very unpopular due to failure to manage the economy and deepening autocracy.

The UK based EIU in parts of its report which the PF Media Director left out but focused on President Lungu winning elections says the economy and governance of the country will worsen.

Below are part of the reports omitted in Sunday Chanda’s story;

The Economist Intelligence Unit expects the ruling Patriotic Front, led by the president, Edgar Lungu, to remain in power. However, the government will become increasingly unpopular as a result of economic mismanagement and deepening autocracy.

  • Given planned heavy public borrowing, an IMF loan deal is not expected to be reached in the medium term.
  • Economic policy will remain erratic, with sudden changes to the regulatory environment as the government attempts to meet its spending needs.
  • Fiscal policy will be lax up to 2021 as the government pursues a debt-financed infra-structure programme.
  • Revenue will rise as a result of tax increases, but the fiscal deficit will stay wide. From 2022, after the 2021 elections, we expect deep spending cuts to begin.
  • High inflation will necessitate a tight monetary stance until 2021, when there will be a reversal of the stance from the central bank as inflationary pressures begin to diminish in 2022-23 as the fiscal deficit narrows.
  • Real GDP growth will average 3.2% a year in 2019-23.
  • Detrimental changes to the tax regime will keep mining growth far below potential, especially in the early part of the forecast period, but the effects will be partly masked by government capital spending.
  • The current-account will remain in deficit in 2019-21 as a result of high government capital spending and debt-servicing.
  • As global copper prices continue to climb and government austerity reduces imports, the account will move into surplus in 2022-23.
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Start: 2019-07-01 End: 2019-07-31