The socio-economic environment is important for creating a fiscal space in any country. The performance of the Zambian economy over the past decade has been mixed. Zambia transited from a low-income to a lower-middle-income country in 2011 and back to lower income country in 2021. After an impressive real GDP growth rate averaging 6.5 percent between 2005 and 2014, the growth slowed down to an average of 2 percent between 2015 and 2021. The GDP per capita shrunk from US$1,805 in 2014 to 1,157 in 2021. The decline in real GDP growth rate during this period can be attributed to droughts and falling copper prices between 2015 and 2020 that adversely affected the agricultural output, the mounting debt and debt service that subsequently negatively affected the construction sector and overall economic growth. The already fragile economy was worsened by the impact of the Coronavirus pandemic of 2019 (COVID-19) that tourism and virtually affected all sectors except for education, manufacturing and ICTS.
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