Zambia’s economic growth slowed to 6.6% in 2011 from 7.6% in 2010, mainly as a result of a weaker mining sector performance. However, the medium-term economic outlook appears favourable, underpinned by sustained expansion in agriculture, construction, manufacturing, transport and communications, and by a rebound in mining. Inflation is projected to remain in single digits, reflecting prudent monetary policy, while the objective of exchange rate policy is to maintain external competitiveness. Increasing domestic revenue collection remains a priority for the medium term and large infrastructure developments will require additional resources. The government plans to raise USD 700 million (US dollars) via a bond issue in 2012 to cover a funding gap for infrastructure projects. This infrastructure investment is expected to boost growth by up to 2 percentage points per annum. Risks to the outlook include Zambia’s vulnerability to external shocks and a sluggish global economic recovery, which could reduce demand for exports. Moreover, maintaining investor confidence has emerged as a key issue after the government reversed the privatisation of Zambia’s telecoms company.