Inflation in Zambia slowed to a two-and-a-half year-low in April, the slowdown occurring for the ninth consecutive month.
Even though consumer prices rose 11.5% from a year earlier, compared with 13.1% in March, food-price growth slowed to 14.1% in April, compared to 15.3% in the previous month. Non-food inflation decelerated to 8.2% from 10.3%. Prices climbed 0.7% in the month.
The decline in inflation now eases pressure on Zambia Central Bank’s monetary policy committee (MPC) to raise interest rates when it meets next month. The MPC may now have room to keep the key interest rate unchanged on May 17 to assist the economy’s fragile recovery.
The Zambian kwacha has appreciated 6% against the dollar this month, making it the best performing currency on the continent. The gain has been partly driven by China committing to join a creditors’ committee to restructure about $17.3 billion of Zambia’s external debt.
The decline in inflation also gives the MPC time to assess the impact a stronger currency will have in offsetting upward price pressures caused by supply shocks from the war in Ukraine, removal of fuel subsidies, and Indonesia’s ban on cooking oil exports.
Inflation rates have risen especially across East African nations as global food, fuel prices jump following the war in Ukraine, with the exception of Tanzania. March 2022 inflation rate was as follows:
- •Rwanda – 7.5%
- •Kenya – 5.6%
- •Uganda – 3.7%
- •Tanzania – 3.6%
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