By MAIMBOLWA MULIKELELA –
THE Bank of Zambia (BoZ) has said steady progress has been recorded in fiscal consolidation with preliminary data indicating that the fiscal deficit for the fourth quarter of 2014 was 10.1 per cent lower than programmed.
According to a statement issued by the BoZ in Lusaka, as the percentage of the projected Gross Domestic Product (GDP), the deficit was around 1.3 per cent.
During the quarter, total revenue and grants were 16.3 per cent lower than programmed, with all the revenue categories falling short of the targets.
The BoZ said consequently, total expenditure was also 11.7 per cent below the fourth quarter projection.
For the year, preliminary data indicated that the deficit was estimated to be 4.8 per cent of GDP, thus 0.7 percentage points lower than the programmed 2014 deficit of 5.5 per cent of GDP.
“The estimated end-year fiscal deficit is a reflection of the Government’s efforts aimed at fiscal consolidation through the containment of expenditures,” the BoZ said.
In the fourth quarter, selected indicators of economic activity monitored suggested increased output in some sectors of the economy while output in other sectors declined.
In the agriculture sector, the stock of maize grain held by the Food Reserve Agency rose by 6.9 per cent to 1,346,344 metric tonnes at end December 2014 on account of additional domestic purchases following the record bumper harvest.
Similarly, rice stocks rose by 24.6 per cent to 2,613 metric tonnes at end December 2014 due to local purchases.
In the manufacturing sector, production of clear beer, soft drinks and packaged mineral water rose by 2.6 per cent, 18.8 per cent and 71.1
per cent respectively.
In the construction sector, production of cement increased by 14.4 per cent to 459,387 metric tonnes.
However, in the energy and tourist sectors, electricity generation and international passenger arrivals at the country’s four international airports declined by 2.3 per cent and 13.8 per cent to 3,472,374 Megawatt and 151,017 passengers, respectively.
Preliminary figures regarding overall GDP growth suggested that non-mining output grew strongly at close to 7.0 per cent.
However, output in the mining and quarrying sector was estimated to have contracted by around 1.4 per cent, pulling down the overall GDP growth to 6.0 per cent in 2014 compared to 6.7 per cent in 2013.
“Growth in non-mining output was largely driven by the following sectors: transport, storage and communications; construction, financial institutions and insurance; agriculture, forestry and fishing; wholesale and retail trade; and community, social and personal services,” the BoZ said.