Zambia’s annual inflation slowed to its lowest level in two years in September, supported by a stronger currency that helped reduce import costs.
Consumer prices increased by 12.3% year-on-year, down from 12.6% in August, according to Acting Statistician-General Sheila Mudenda, who briefed reporters on Thursday in the capital, Lusaka.
Food prices, which account for more than half of the overall inflation basket, rose 14.6% annually in September, slightly easing from 14.9% in August. Non-food price growth also slowed, climbing 9% compared with 9.3% the previous month. On a monthly basis, overall prices edged up by 0.5%, Bloomberg reports.
The data reflects a gradual easing of inflationary pressures in Zambia, driven largely by currency stability and moderated import costs, signalling potential relief for consumers after months of high price increases.
Africa’s second-largest copper producer is benefiting from a stronger fiscal environment and rising copper prices, which have helped the Kwacha gain 17.3% against the Dollar this year, ranking it as the continent’s second-best-performing currency among those tracked by Bloomberg.
A continued easing of inflation could prompt the central bank’s monetary policy committee to lower its key interest rate in November, after keeping it steady at 14.5% for two consecutive meetings. The bank forecasts inflation will return to its 6%–8% target range in the first quarter of next year, with an average of 13.3% expected in 2025.
This month, the International Monetary Fund approved an extension of the southern African nation’s existing program, giving it time to complete the final review and prepare for a possible continuation.
The 38-month facility, originally set to conclude with the sixth review next month, will now remain in effect until 30th January.
Preliminary figures indicate that the economy expanded by 5.2% in the second quarter, up from 4.5% in the previous quarter.