Moody’s Revises Zambia’s Economic Outlook from Stable to Positive, Citing Debt Reduction and Economic Growth

(Zambia Monitor) Moody’s Investors Service has upgraded Zambia’s economic outlook from stable to positive, while affirming the country’s long-term local and foreign currency issuer ratings at Caa2.

In its latest assessment, Moody’s cited expectations of a sustained decline in Zambia’s government debt burden, supported by stronger economic growth and continued fiscal consolidation.

The credit rating agency also pointed to a relatively stable exchange rate against the US dollar and reduced external vulnerabilities as factors influencing the improved outlook.

“Improved economic conditions, easing drought, growing external reserves, higher exports, and lower food and energy imports further reduce risks,” Moody’s noted.

While recent declines in copper prices pose challenges, the agency said they were not expected to trigger significant external stress. It added that ongoing fiscal reforms and official-sector support continue to enhance liquidity and improve debt dynamics.

Despite the positive outlook, Zambia’s Caa2 rating remains unchanged due to its still-high debt levels, ongoing liquidity challenges, and vulnerability to environmental and external shocks.