Inflation Rate Continues To Slow In February
Zambia’s annual inflation slowed to 14.2% in February – down from the two-year low of 15.1% recorded in January. This continues the trend of consistently decreasing inflation rates since Hakainde Hichilema and the United Party for National Development took office last year.
In August 2021, annual inflation peaked at 24.4%, however since the UPND came to power, rates have continually dropped month on month.
According to the Zambia Statistics Agency (ZamStats), the slowdown was spurred by an easing of both food and non-food prices. This means that more Zambians will now be able to afford to put food on the table for their families – a key pledge of the UPND’s election manifesto.
Slowing inflation also allows the government to keep interest rates low, increasing the likelihood of securing a final deal with the International Monetary Fund. Last month, the IMF announced a staff-level deal with the Zambian government, providing a $1.4 billion extended credit facility for Zambia and bringing the country a step closer a complete debt overhaul.
When President Hichilema first took over at State House, Zambia’s debt burden was more than 120% of the country’s total economic output. Since then, HH’s government has committed to slashing the country’s deficit and significantly reducing overall borrowing. This forms a cornerstone of the UPND’s commitment to restoring Zambia’s economic prosperity.
Last week, the Bank of Zambia announced it would continue to keep interest rates at 9%, owing to predictions of strong growth for this year. Overall, the Bank predicted that the Zambian economy will grow by 3.5% in 2022 and 3.6% in 2023.