Zambia's Finance Minister Situmbeko Musokotwane said on Thursday he was confident that inflation would drop to single digits by end of this year, and that the heavily-indebted southern African nation should reach a deal with IMF by mid-year.

Musokotwane said in a presentation to review first quarter economic and budget performance that he also expected Zambia to continue registering positive economic growth.

"I have no doubt whatsoever that this being April, certainly by December the rate of inflation will have gone down to single digit level," Musokotwane said.

Zambia is in the process of restructuring its external debt with creditors and the International Monetary Fund (IMF), after years of over-borrowing drove its debt burdern above 120% of GDP. Inflation erodes domestic currency debt, but conversely makes foreign debts in hard currency more burdensome.

Zambia's external debt includes around $3 billion in international bonds, $2.1 billion to multilateral lending agencies such as the IMF and another $3 billion to China and Chinese entities.

Zambia's inflation slowed to 13.1% year-on-year in March from 14.2% recorded in February mainly on account of lower food prices, the Zambia Statistics Agency said.

Musokotwane said a global spike in the price of petroleum products had also affected Zambia also the current price of fuel was still subsidised.

Musokotwane said he expected Zambia to reach agreement with the International Monetary Fund in the middle of this year and the government had continued to informally engage creditors.

The restructuring of Zambia's debt and provision of incentives to business was expected to driver Zambia's economic growth higher, Musokotwane said.

(Reporting by Chris Mfula; Editing by Tim Cocks)