Fitch Ratings has maintained Zambia’s Long-Term Foreign Currency Issuer Default Rating (IDR) at ‘Restricted Default’ (RD), reflecting unresolved non-bond foreign currency commercial debt as the country progresses with restructuring under the Common Framework.
The rating agency anticipates Zambia’s public debt will decrease from 126% of GDP in 2023 to 100% by 2025, bolstered by Eurobond haircuts, primary budget surpluses, and economic growth. However, Fitch revised Zambia’s 2024 GDP growth forecast to 1.2%, citing the adverse effects of El Niño on agriculture and electricity generation.
Inflation remains elevated at 15% in 2024, though expected to moderate in subsequent years, supported by improved food supplies and reduced exchange rate volatility. Additionally, reforms by the Bank of Zambia aim to stabilise the local currency and reduce dollarisation.
Fitch affirmed restructured Eurobonds at ‘CCC+’, highlighting continued liquidity risks and high debt service ratios. Analysts predict a current account surplus of 1.1% of GDP in 2024, improving to 2.7% by 2026, driven by higher metal exports and growing international reserves.
While economic recovery is forecast for 2025 and 2026, challenges such as elevated debt levels and energy constraints remain, underscoring the complexity of Zambia’s financial path forward.
 at ‘Restricted Default’ (RD), reflecting...){kind=link}