For the month of September, PMI rose to 46.6 from 43.4 in the month of August. A score of 46.6 might still be below a 50.0 mark but it is actually an improvement when compared to the previous month. This entails that business activities declined but at a decreasing rate.
The 46.6 from 43.4 improvement meant that job cuts, output, and new orders reduction were not as severe as in the month of August. A report by Stanbic Bank confirmed the improvement by stating that, ‘output decreased at the slowest pace in seven months amid looser Covid 19 restrictions. Employment as well, showed signs of near stabilization and purchasing activities continued falling but at a reduced pace.’
According to a report from PWC on the 2021 budget that was announced in September 2020, “economic growth is projected to contract 4.2% this year owing to the COVID-19 pandemic and ongoing electricity shortages, putting the economy into recession for the first time in 22 years and raising questions about how Zambia will manage its large debt burden”.
The aforementioned statement was echoed by the Minister of Finance. With PMI still lurking below 50, a recession is now evident with the contraction in growth. However, the slight improvement may be attributed to the Governments move to further open up the economy that has been grappling with the impact of Covid. This has helped unlock bottlenecks that Covid introduced in the supply chain.