Inflation Drops By 1% As Economy Keeps Growing

Zambia’s annual inflation rate dropped by more than 1% last month as the country’s economy was shown to grow over 3% in 2021.

According to the Zambia Statistics Agency (ZAMSTATS), inflation for March fell to 13.1%, down from 14.2% in February. Annual food inflation was also down from 16% to 15.3% over the same time period. 

ZAMSTATS confirmed that non-food inflation also fell last month: from 11% in February to 10.3% in March. The prices of glassware, tableware and household utensils were all confirmed to have dropped. 

The drop confirms the trend of consistently falling inflation rates since the UPND government took office in August last year. At that time, rates stood at 24.4% following a decade of financial mismanagement by the Patriotic Front.  

The falling rate of inflation increases Zambia’s buying power for foreign commodities: helping the government to cushion citizens from rising global prices brought on by the war in Ukraine and other international events. It also means that the money in citizens’ pockets is worth comparatively more, helping families to afford daily essentials and put food on their tables. 

Added to this, preliminary estimates show that the country’s Gross Domestic Product (GDP) increased by 3.6% in 2021; compared to a contraction of 3.1% in 2020, largely brought on by the Covid-19 pandemic.  

ZAMSTATS says the rise in GDP was brought on by huge growth in quarrying and mining, as well as wholesale retail trade, construction and manufacturing, all accounting for 61.8% of economic growth.  

Total trade also increased last month: up 7.2% compared to the same period last year. Meanwhile, Zambia has recorded a trade surplus of K6 billion, with exports up 2.7%.