Outlook for 2011-12

• The president, Rupiah Banda, and the ruling party, the Movement for Multiparty Democracy (MMD), will remain in power until the presidential and parliamentary elections in the second half of 2011.
• The elections are likely to be closely contested and-despite Mr Banda's substantial advantages of incumbency-the Patriotic Front's leader, Michael Sata, could win the presidential election.
• Whichever party wins, the government is likely to stick to a pro-market agenda and promote macroeconomic stability, as strong public pressure to promote job creation ensures a high degree of economic pragmatism.
• The fiscal deficit is forecast at 3.8% of GDP in 2011 as election-related spending rises and at 4.3% of GDP in 2012 as infrastructure spending increases sharply. Public debt will rise but will remain sustainable.
• Real GDP growth is forecast at 7% in 2011 and 7.2% in 2012, underpinned by subsidies for producers of maize, investments in mining, fiscal incentives for investors in the "priority sectors" and a sharp rise in public investment.
• The current account is forecast at a surplus of 2% of GDP in 2011 and a deficit of 3.7% of GDP in 2012 as export growth slows, in line with copper prices, and strong foreign and public investment boost imports of capital goods.

Monthly review

• In early April the two Chinese managers who shot and wounded 11 miners at the Collum coal mine in Southern province during a protest over pay were acquitted after the state prosecutor dropped charges against them.
• Mr Banda was endorsed as the MMD's presidential candidate at the party's convention in April. He has emerged from the convention in a strong position, but this seems to have come at the cost of a decline in intra-party democracy.
• A disagreement over the use of parallel vote tabulation (PVT) in the upcoming elections has pitted the government against civil society groups and the opposition. If it persists, it could undermine the election's credibility.
• The government is to make a decision on the future of the Indeni oil refinery by end-2011. The best decision for consumers would be to shut the refinery down and import refined fuel; but the government is unlikely to opt for this.
• The government expects maize output to rise by 10-25% this year. This would boost farmers' incomes but would also put pressure on the Food Reserve Agency, which has struggled to purchase the maize surpluses in 2009-10.
• The Copperbelt Energy Corporation plans to invest over US$900m in five hydropower projects that would add 800 mw to generation capacity by 2018.