Slower economic growth expected amidst the global vaccination race
We’re sharing an overview of the state of moratoriums for borrowers that were introduced in 2020 across geographies of lending companies on Mintos, summaries of the state of emergency in these countries, and their projected economic growth after one year of the pandemic
Many countries of borrowers suffered contracted GDPs in 2020, with prospects of growth projected in 2021. The forecasted growth is highly dependent on the increase in domestic consumption, especially in the hotel, restaurants and catering (HoReCa) and in entertainment sectors which are closely related to restriction measures. It will also depend on the redistribution of increased social spending from health and financial aid into public and foreign investment, and ramped up export that’s directly correlated to levels of production across various industries globally. One of the most important factors that will determine the viability of expected economic progress in 2021 and 2022 is how the world will manage the global vaccination efforts.
In the article below, we share details about the status of moratoriums in countries where lending companies that offer loans for investment on Mintos do business. To anticipate possible developments related to the financial strength of borrowers, we’re also sharing an overview of pandemic-related measures in these countries, results of the economic downturn in 2020, as well as international agencies’ forecasts of the expected growth one year after the beginning of the pandemic.
Access a specific country directly from here: Albania, Armenia, Belarus, Botswana, Bulgaria, Colombia, Czech Republic, Denmark, Estonia, Finland, Georgia, Indonesia, Kenya, Kazakhstan, Kosovo, Latvia, Lithuania, Mexico, Moldova, Namibia, North Macedonia, Philippines, Poland, Romania, Russia, South Africa, Spain, Turkey, Ukraine, United Kingdom, Uzbekistan, Vietnam, Zambia.
Here you can read the previous overview that we made in November 2020.
As of April 2021, there is no moratorium for borrowers in Albania.
Face masks are mandatory in public spaces, and except for a nighttime curfew (from 22:00 to 6:00) which affects the working hours of hospitality services, there are no restrictions on movement within the country. In cities and towns highly affected by the virus, classes for elementary and high schools are held online. Commercial airlines are operating from Tirana, and public transport and taxi services operate without interruptions.
In 2020, Albania recorded an economic downturn of 3.5%, and estimated growth for 2021 is 5%, with a predicted slower recovery in the period over the next 4 years, with a 3.5-4% estimated growth for this period.
As of April 2021, there is no moratorium for borrowers in Armenia.
The quarantine previously in power until January 2021 was extended to July 2021, due to the third wave of the pandemic in the country. In March, the martial law status was lifted. The country is still experiencing continuous political tensions, especially in light of the upcoming elections on June 20.
No significant foreign or domestic investments in the Armenian economy are expected any time soon. In September 2020, the country’s government has approved the signing of an agreement with the European Commission for financial assistance of €30 million. The funds will be directed into the health system and mitigation of impacts of the pandemic on the economic growth. Fitch Ratings predicts the country’s GDP growth of 3.2% in 2021 and 4% in 2022.
As of April 2021, there is no moratorium for borrowers in Belarus.
The country doesn’t practice any type of lockdowns and has plans to develop its vaccine. According to the Eurasian Development Bank, in 2021, GDP growth in Belarus only may be 0.1%, but according to the latest IMF forecast, Belarus’ GDP is expected to decrease by 0.4% this year, after it shrank by 0.9% in 2020.
The state of public emergency in Botswana has been in power ever since April 2020. The country imposed a nationwide curfew from 20:00 to 4:00, and local authorities are empowered to introduce lockdowns as needed.
After growing by 3% in 2019, Botswana’s economy contracted by an estimated 8.9% in 2020. The most affected sectors are trade, construction, manufacturing, hospitality and services, and transport. Fuel prices and lower demand contributed to a reduction of the annual inflation rate from 2.8% in 2019 to 1.9% in 2020. Real GDP growth is projected to recover to 7.5% in 2021 and 5.5% in 2022, based on the revival of domestic demand that is expected along with the reduction of impacts of the pandemic and slow reopening of global economies.
The moratorium on bank loan payments in Bulgaria has been extended to 23 March 2021, but this does not apply to borrowers of alternative lenders. Currently, the state of emergency is extended until the end of April. Culture and sports venues are allowed to work at 30% capacity. Hospitality venues offer services exclusively in outdoor seating areas until 23:00. Stores with more than 300 m2 can serve customers in the outdoor areas next to the main building.
In 2020, the Bulgarian economy contracted by 4%. The International Monetary Fund (IMF) forecasts 4.1% growth in 2021 and 3.7% in 2022.
Colombia hasn’t imposed a moratorium for borrowers during the pandemic.
With new cases, Colombia continues having local curfews. As of 7 April, foreign nationals and Colombian citizens will need a negative PCR test to enter the country by air. Private and public mass gatherings are prohibited, and local authorities are empowered to enforce business and movement-related restrictions in case of new increase in cases.
The country’s GDP has declined by 6.8% in 2020 – only government consumption grew. In 2021, the expected GDP growth is 4.8%. During the pandemic, additional healthcare spending, income support to households, wage subsidies, and extended credit lines have been facilitated by a temporary suspension of the fiscal rule. Public debt is expected to substantially rise, but it will remain manageable under the authorities’ plans which include higher revenues and public spending cuts from 2022 onward.
As of April 2021, there is no moratorium for borrowers in the Czech Republic.
The state of emergency has been extended until the middle of April. Only essential shops are open and domestic travel restrictions remain in place.
Fundamentals that drove the growth of the Czech economy (domestic demand, exports and related tax revenues) were strongly affected by the pandemic, resulting in the contraction of 5.6% in 2020. The expected GDP growth in 2021 is 4.2%.
As of April 2021, there is no moratorium for borrowers in Denmark.
Currently, there is no lockdown in the country. From 13 April, shopping malls, department stores, and similar venues with an area of 15 000 m2 or less may reopen. This does not apply to cinemas, restaurants, and cafes in such venues. Cultural facilities will be allowed to open from 21 April, and restaurants are allowed to serve their guests in the outside seating areas. From the beginning of May, concert venues, theatres and cinemas will be allowed to open and restaurants will be allowed to serve guests indoors. In May, auxiliary education and all sports facilities will be allowed to reopen.
Having an open economy and a structural balance of payments surplus, Denmark’s prosperous economy is still highly dependent on foreign trade. The pandemic caused a drop in the Danish GDP – in Q2 2020 it was -7.7% YoY. According to the IMF, partial recovery underpinned by private consumption is recorded during the second half of the year, leading to an overall decrease of 4.5%. Denmark’s real GDP is expected to expand by a solid 3.5% in 2021 and around 2.5% in 2022. The European Commission projects that private consumption will rebound by 4.7% in 2021 and around 3% in 2022. Still, due to high levels of uncertainty, companies may postpone or cancel new investments.
As of April 2021, there is no moratorium for borrowers in Estonia.
Estonia is providing different types of support to its citizens: sickness, unemployment and downtime benefits. The interest rate on tax is reduced by 50% until the end of 2021.
Since March, all activities in public indoor spaces are prohibited. Hospitality, relaxation, and entertainment venues will remain closed until mid-April, and only essential goods stores are open while food can be served for takeaway.
GDP contracted by 4.7% in 2020. The expected growth in 2021 is forecasted at 3.4% and 3.3% in 2022. Consumption is expected to increase with spending of private savings made during the peak of the pandemic. Investments are expected to regain momentum along with increased industrial production, exports, and a rebound in the services sector.
As of April 2021, there is no moratorium for borrowers in Finland.
The country provides its citizens with different benefits such as sickness allowance and unemployment support. Despite the restrictive measures across the country, Finland is recently seeing an increase in new COVID-19 infections. As a response, general and local restrictions can be reinforced to limit the rise of new cases. Currently, group activities are restricted, restaurants are closed in many parts of the country, and the authorities recommend remote work in public and private sectors.
In the second half of 2020, the country started to recover from the pandemic. The recovery was led by somewhat increased domestic consumption and exports. GDP has decreased by an estimated 4% in 2020 and is projected to expand by 1.5% in 2021 and 1.75% in 2022. Investment growth is expected to be slow due to uncertainty about the economic outlook. The unemployment rate is expected to peak in 2021, and remain high by the end of 2022.
As of April 2021, there is no moratorium for borrowers in Georgia.
There is a ban on movement from 21:00 to 05:00 for both cars and pedestrians, with a high penalty for violation of the curfew. During weekends, catering facilities can work only for takeaway.
The pandemic has caused a sharp contraction of Georgia’s small open economy with a large tourism sector, a deterioration in fiscal accounts including higher government debt, and increased vulnerabilities stemming from Georgia’s higher external debt. The pandemic-driven contraction of GDP in 2020 is estimated at 6.1%. Fitch forecasts real GDP growth of 4.3% in 2021 and 5.8% in 2022. Fiscal policy will remain accommodative in 2021, as authorities plan to continue supporting individuals and businesses affected by the pandemic, including the continuation of income tax relief for businesses that retain low-wage workers, the credit guarantee scheme for small and medium enterprises, and social transfers for vulnerable groups. According to the government, measures outlined in the budget for this year total 2.1% of GDP. A high share of foreign-currency loans (55.3% at the end of 2020), overall uncertainties, and the end of the government support measures will affect the asset quality of banks, earnings, and capitalization. By the end of 2020, non-performing loans (NPL) increased to 8.2% of gross loans. In 2019, the amount of NPLs was 4.4% of the gross loan amount.
As of April 2021, there is no moratorium for borrowers in Indonesia.
The country has no lockdowns or any other strict measures related to the pandemic.
Monetary policy remains accommodative also during 2021. The Bank of Indonesia has cut its policy rate five times in 2020 and again in February 2021. Quantitative easing and a range of macro-prudential measures were used to increase liquidity, while inflation is projected to remain low.
As of April 2021, there is no moratorium for borrowers in Kazakhstan.
The Kazakhstan government financially supports vulnerable groups and companies affected by the pandemic through tax deferrals and subsidized loans for working capital to minimize obligation problems SMEs might experience with salaries and supplier payments. Through online transfers, the government has deployed cash support to around 24% of the population. Many venues and different types of business are open, including facilities for sports and recreation, culture, religious objects – with some limitations to working hours or space capacities. Regional and local authorities are empowered to impose restrictions in cases when infection rates increase.
Besides the impact of the pandemic on the domestic economic activity in Kazakhstan, the country was also highly affected by the global economy’s halt in 2020, since the price of oil – the country’s main export commodity – dropped. In 2020, GDP contracted by 2.8% from January to September, while in the same period in 2019 GDP increased by 4.1%. In case of an improved global economic outlook with higher demand for exports and growth of domestic economic activities, the economy of Kazakhstan is expected to grow by 2.5% in 2021.
As of April 2021, there is no moratorium for borrowers in Kenya.
As the rate of positive tests grew from 2% to 22% in Q1 2021, Kenya imposed a new lockdown to fight the spread of the COVID-19 infections. The country’s capital Nairobi accounts for 60% of all cases. The new lockdown introduces restrictions to social gatherings, limits to businesses, a ban on on-site studies, and similar measures. The IMF has approved a three-year, $2.34 billion financing arrangement, to help the weak economy fight the impacts of the pandemic, while already being debt vulnerable.
As of April 2021, there is no imposed moratorium for borrowers in Kosovo, but the country’s central bank allows extensions for individual cases, starting from September 2020 and until September 2021.
A countrywide curfew is imposed from 22:00 until 05:00. School classes are held online until 18 April, gyms and sports facilities are closed, food services are open for takeaway and delivery. All gatherings of more than 10 people are prohibited in Kosovo.
The economy has contracted by 7.2% in 2020, while estimated growth in 2021 is projected at 4.5%.
As of April 2021, there is no moratorium for borrowers in Latvia.
The Latvian government has introduced several support measures for businesses and individuals related to taxes, income compensations, rent exemptions and support for entrepreneurs, allowance for individuals, one-off benefits for pensioners and families with children. The state of emergency lasted for three months. Now, non-essential businesses are slowly opening, restaurants can serve takeaway orders, while remote work is strongly encouraged by the state, and traveling is not recommended. Except for professionals, indoor sports activities are prohibited.
In Q2 2020, Latvian GDP decreased by 8.9% (YoY). According to the Ministry of Economics, compared to 2019, the decrease of Latvian GDP in 2020 could be around 4-5%. Fiscal policy has helped to prevent a more serious downturn and will continue further helping individuals and businesses in need.
As of April 2021, there is no moratorium for borrowers in Lithuania.
The country is under strict restrictions imposed in November 2020, and lasting until the end of April 2021. Cultural activities are stopped, all entertainment facilities are closed, and there are limitations on movement, social gatherings, and on-site work. The country has strict regulations for those traveling to or transitioning through Lithuania.
Following a relatively mild contraction in 2020, the country’s GDP is projected to grow by around 3% in 2021 and 2022. The unemployment numbers have grown, and although with a gradual decline, they’re expected to remain above the pre-pandemic levels for some time.
As of April 2021, there is no moratorium for borrowers in Mexico.
Mexican state and local authorities are providing tax relief to citizens and businesses affected by the pandemic. The country’s restrictions work on a red-orange-yellow-green color system, representing different levels of limitations to social and business activity (red meaning only essential economic activities are allowed, and green meaning all activities are allowed, with precautionary health measures and social distancing).
After a deep contraction of the Mexican economy in the first half of 2020, economic activity started to recover in construction, manufacturing, and especially in automotive in the second half of the year, while retail sales have recorded a 10% drop since February 2020.
Investments are 17% below levels from 2019, and GDP is projected to grow by 3.6% in 2021.
As of April 2021, there is no moratorium for borrowers in Moldova.
In Moldova, the current state of emergency is set to last until the end of May 2021. A curfew is in effect from 23:00 to 5:00, while shopping malls and non-food stores close after 18:00. Catering establishments work from 7:00 to 20:00.
Economic activity plummeted in the first three quarters of 2020, primarily due to a reduction in domestic consumption. The lockdown measures affected trade and industrial production, while a severe drought harmed agriculture, resulting in the highest unemployment in the last five years. Poverty is expected to increase to 13%. By the end of October, revenues decreased by 1.7%, mainly driven by corporate income tax and VAT on the import. As social spending took priority, public investment decreased by more than 4%.
As of April 2021, there is no moratorium for borrowers in Namibia.
In the country, a curfew is imposed from 22:00 to 4:00. Some restrictions are relaxed, including indoor and outdoor gatherings, while hospitality venues can host up to 100 people.
In 2020, the country’s GDP contracted by 8% compared to 2019. The inflation rate declined further and has been at the lowest since the country’s independence, mainly driven by declines in transportation and housing. The budget deficit increased to 9.5% of the total GDP.
GDP is expected to grow by 2.7% in 2021, as a result of growth in the mining, agriculture, and transportation sectors. Of course, this is dependent on the progress of vaccination in the country, and levels of international prices for Namibia’s export commodities, such as uranium.
As of April 2021, there is no moratorium for borrowers in North Macedonia.
With the rise of new COVID-19 cases, stricter measures were imposed across North Macedonia in April, with a nationwide curfew from 20:00 to 5:00. The Parliament has extended the state of emergency until the end of June 2021. Dine-in services are banned, and catering facilities can work only with takeaway orders – except on airports and in hotels. Sports venues are closed, non-essential education events are banned on-site, just like any gathering of groups of more than four persons in public places.
North Macedonia records an economic downturn of 4.5% in 2020. Estimated growth for 2021 is 4%, with a slower recovery of 3.5-4% in the next 4 years.
As of April 2021, there is no moratorium for borrowers in the Philippines.
At the same time, financial institutions are encouraged to offer financial relief terms to their customers, a non-binding authority recommendation. The Philippines have suspended foreign nationals from entering the country until 21 April 2021, while the number of inbound international passengers has been limited to 1500 persons a day. Restrictions and quarantines are localized – some areas and cities are under “Enhanced Community Quarantine”, while others function under measures of “Modified General Community Quarantine”.
Through 2020, the country’s economic downturn deepened to -9.5%. Estimated growth for 2021 is 6.9% in 2021, with similar growth projected for the next four years, an average of 6.5%.
As of April 2021, there is no moratorium for borrowers in Poland.
While vaccination has started in Poland, restrictions to economic activity and public social life are still in place. All activities in cultural entertainment facilities are suspended and nightlife venues are closed. Until 18 April 2021, wedding ceremonies and other celebrations are prohibited, and all education is happening online. Shopping centers remain closed, while grocery stores, pharmacies, cosmetics, and beauty supply shops (not salons) and bookshops are allowed to work. Catering facilities work for takeaway and delivery.
It’s estimated that GDP contracted by 3.5% in 2020, and it’s projected to grow by 2.9% in 2021, and 3.8% in 2022. Recovery began in Q3 2020 due to increased domestic consumption and government support. As restrictions were reintroduced due to the next wave of the pandemic in Poland, the growth suffered a new hit at the end of the year. Unemployment levels are expected to peak in 2021, with a slow decrease in the year after.
The moratorium for borrowers that was extended several times since the beginning of the pandemic in Romania finally ended on 31 March 2021.
There is no lockdown in the country, but the latest measures from the end of March 2021 include a curfew and limited working hours for shops during Friday and the weekends.
A government deficit averaging above 4% was largely driven by pension increases, and it’s further impacted by the effects of the pandemic. The IMF estimates a deficit of 7% in 2020. The deficit is expected to increase further, to around 7.7% of GDP in 2021 and 7.6% in the following year. According to the IMF’s forecast, this expansionary fiscal policy should entail a debt-to-GDP ratio increase from 36.8% in 2019 to 44.8% in 2020, 49.6% in 2021, and up to 54.4% in 2022.
As of April 2021, there is no moratorium for borrowers in Russia.
Employers are eligible for state support for the employment of citizens who were registered at employment centers before 1 January 2021. Depending on the state of the COVID-19 cases, regions can introduce curfews from 23:00 to 6:00.
The Russian economy contracted by an estimated 3.1% in 2020. During the previous year, lockdown measures in Russia were far less strict than in many countries. Because of this and different fiscal measures, positive contribution from net trade, and the country’s relatively small service sector, the impact of a sharp fall in domestic demand was somewhat cushioned. Fitch forecasts GDP growth of 3.0% in 2021, but the second wave of the pandemic in Russia currently impacts economic activity in the first half of 2021.
As of April 2021, there is no moratorium for borrowers in South Africa.
Adjusted alert level 1 is in place from 1 March 2021, which means that most of the normal activities can resume, while citizens need to follow health guidelines. Restaurants, public spaces and indoor entertainment venues are open, while face masks are mandatory and social distancing is recommended. The curfew lasts from 00:00 to 04:00.
According to the country’s Statistics agency and report published in March 2021, South Africa’s economy contracted by 7% in 2020. The most significant decrease is recorded in manufacturing, followed by trade, catering and accommodation. While few jobs were created in 2019, the pandemic erased between 600 000 to 700 000 jobs in Q2 2020.
The IMF projects the annual growth for South Africa in 2021 to be 3.1%, followed by a growth of 2% in 2022.
As of April 2021, there is no moratorium for borrowers in Spain.
The Spanish government is giving limited amounts of aid, guarantees, and subsidised loans to companies and self-employed individuals affected by the pandemic. A general lockdown is currently imposed until 9 May. Until the end of April, all non-essential traveling from non-European countries is banned. Regions have a curfew from 22:00 or 23:00 to 6:00, there is a perimetral lockdown on the county level and all local measures are in the domain of regional authorities. Face masks are obligatory, and hospitality services are working with limitations regarding operating space and working hours. In Catalonia, the weekend ban on non-essential stores and large retailers has been lifted. The vaccination of senior citizens is at high levels, resulting in a lower death count post-third wave in Spain.
According to Fitch, Spain’s economy is expected to recover in 2021, as the vaccine rollout should have an especially positive impact on the contact-intensive sectors, as tourism is one of the greatest contributors to the country’s economy. Spain is benefiting from the European Central Bank’s (ECB) large-scale quantitative easing (QE) program. The country’s public debt structure that consists of relatively long maturities partially mitigates the risks from a higher debt ratio. The real GDP is expected to rise by 5.3% in 2021 and 6.6% in 2022. According to Fitch, unemployment is expected to rise, peaking at 18.4% in 2021.
As of April 2021, there is no moratorium for borrowers in Turkey.
On 1 March 2021, the Turkish government announced a four-tier system for managing the local COVID-19 developments, representing 4 levels of risk: low (blue), medium (yellow), high (orange), and very high (red) – based on infection and vaccination rates. The nationwide curfew in Turkey is set between 21:00 and 5:00, while in high-risk areas there are weekend curfews from Friday evening to Monday early morning. Except in these regions, hospitality services and dining-in will be open for indoor serving – at half capacity and until 19:00.
To mitigate the effects of the pandemic, the government loosened its monetary policy, extended credit, and delved into its foreign reserves. However, there was a projected 5% contraction of GDP in 2020. Still, the economy rebounded by 6.7% in Q3 2020 (Turkish Statistical Institute). In its World Economic Outlook from January 2021, IMF projects growth of Turkish GDP by 6% in 2021 and 3.5% in 2022.
Already in March 2020, the UK government announced that commercial landlords are to be precluded from forfeiting commercial leases and evicting the tenant for non-payment of rent. This decision was initially extended until the end of 2020, with the final extension until 31 March 2021.
The country provides different types of support for its citizens: business support (loans, tax relief and cash grants, financial support to pay wages, taxable grant covering 80% of trading profits for self-employed, etc). Different restrictions are in place depending on the region. Overall, social gathering is prohibited, unnecessary traveling is discouraged, and work from home is recommended whenever possible. Until now, more than 31 million people in the UK have received at least one dose of vaccine.
The British economy’s growth has been slowing down already since “Brexit”, now additionally affected by the pandemic. GDP fell by 2.2% in Q1 2020, and plummeted by 20.4% in Q2 with a yearly loss estimated at 9.8% by the IMF. This signifies the country’s deepest recession since World War II. According to the IMF’s forecast from October 2020, a rebound in 2021 is expected to be 5.9% and 3.2% in 2022.
As of April 2021, there is no moratorium for borrowers in Ukraine.
Ukraine is under an adaptive quarantine until the end of April 2021. The second wave of the pandemic hit the country much harder than the first. Cultural and entertainment establishments and shopping malls were closed, the ban was put on religious services, public and sports events. Food services work only for takeaway, and beauty salons work only per appointment schedule.
The impact of the pandemic and poor grain harvest that has subtracted 1% from GDP was cushioned by firm wage growth, employment support measures, robust remittances, a positive net trade contribution and a moderate monetary and fiscal stimulus. Fitch forecasts GDP growth of 4.1% in 2021, which will be driven by domestic consumption, higher agricultural output and a partial recovery in investment.
As of April 2021, there is no moratorium for borrowers in Uzbekistan. Over the course of 2020, the government used numerous measures to support businesses and individuals affected by the pandemic, mostly in the area of tax deferrals.
Currently, public transportation in Uzbekistan is operating, restaurants and other non-essential businesses and attractions in Tashkent are open, with measures of social distancing and mandatory face-masks in place. Theaters, cinemas and concert programs are allowed for visitors, with the limit to the number of spectators at 50% of venues’ capacities.
According to the World Bank, COVID-19 in Uzbekistan has almost extinguished the country’s recent positive GDP trends. At some point, around 85% of small businesses were temporarily closed and nearly half a million people were pushed to poverty. The Anti-Crisis Fund formed as a response to the anti-crisis policies caused public spending to affect the country’s GDP, but the Fund’s activities ended in the beginning of 2021. According to the IMF’s outlook, the GDP in Uzbekistan grew even in 2020, for 1.6%. The budget for 2021 includes higher expenditures on healthcare and social assistance, and policy lending to support the economy, primarily through the Fund for Reconstruction and Development. In this year, GDP is expected to grow by 5%, a trend forecasted to continue at a similar level in the next few years.
As of April 2021, there is no moratorium for borrowers in Vietnam.
To help the economy affected by the pandemic, the Vietnamese government introduced many mechanisms of support. These measures are related to taxes, fees and loan interest rates, and include support for workers, reduction of electricity prices, a policy of 0% lending interest rate for cooperatives’ salaries for employees out of work, and extensions for value-added tax payment deadlines.
Vietnam was among the few economies in the Asia-Pacific region and the ‘BB’ rating category to maintain positive growth in 2020 – at 2.9%. This was largely due to the country’s success in bringing the pandemic outbreak under control in a timely manner. Fitch has revised the outlook of Vietnam from stable to positive. The country’s external finances have strengthened despite the pandemic: exports grew by 7% in 2020, and the current account recorded a surplus of 3.6% of GDP.
As of April 2021, there is no moratorium for borrowers in Zambia.
Pandemic-related measures are in power, including face masks in public. Restaurants and gyms are allowed to work, while bars have to remain closed, and public gathering is not allowed for groups of more than 5 people.
The pandemic has further pushed an already fragile Zambian economy into a deep recession. The country’s economy was already experiencing high inflation, widening fiscal deficits, unsustainable debt levels, low international reserves, and tight liquidity conditions. With the pandemic, all key sectors deteriorated due to disruption of supply chains, and tourism and services were affected by a globally present decrease in private consumption and investments. After growing by 4% in 2018 and 1.9% in 2019, real GDP contracted by an estimated 4.9% in 2020. During last year, inflation rose to 17.4% and is projected to remain above the target range of 6–8% in 2021, while Zambia’s public and publicly guaranteed debt rose from 91.6% of GDP in 2019 to 104% in 2020.
The IMF expects Zambia’s real GDP growth to be 0.6% in 2021, followed by 1.1% in 2022, and around 1.5% in the following years, mainly due to expected recovery in the mining, tourism, and manufacturing sectors.