Inflation Nears Single Digits

Zambia’s annual inflation rate continued to fall in May, reaching 10.2% by the end of the month – down from 11.5% in April. This is less than half the rate of 24.4% when the New Dawn government took office in August 2021.

The figures were released by the Zambia Statistics Agency (ZAMSTATS) on Thursday. The agency’s Statistician General Mulenga Musepa said the drop was due to price movements in both the food and non-food sectors.

Mr Musepa observed that Copperbelt Province was the biggest contributor to national inflation, accounting for 2.9% of the overall rate. North-Western and Western Provinces experienced the smallest price rises meanwhile, contributing just 0.4% and 0.5% respectively.

ZAMSTATS also confirmed that Zambia’s cumulative trade rose by 0.7% during the period from January to April this year. This is despite the impact of global supply chain issues, including rising fuel and grain prices as a result of the conflict in Ukraine.

A reduction in inflation has allowed the Bank of Zambia to leave interest rates unchanged. Last week, the bank’s Governor Denny Kalyalya told a news conference that lending rates would remain at 9%, easing the pressure on families and businesses to pay their bank loans and mortgages. 

A drop in inflation also means that the money in ordinary citizens’ pockets is worth more, with prices for food and other essential items rising less quickly than in previous months. The fall also cushions Zambian businesses against the impact of global price rises brought on by the lingering effects of the pandemic and the war in Ukraine.