Prices are still rising, just a touch more slowly. September's year over year inflation landed at 6.1%, a notch below August's 6.2%. On a monthly basis, the consumer price index rose 0.4%.
Sheila Mudenda, Zambia's Statistician General, shared the update with reporters in Lusaka on Thursday. Under the hood, food prices decelerated to 5.8% from 6% a month earlier, while non-food inflation stayed unchanged at 6.6%.
With inflation easing, the central bank has more room to maneuver. The Bank of Zambia's rate-setting panel meets on Sept. 30 and could consider another reduction after cutting the benchmark by 25 basis points in May to 13.25%. Zambia is running one of the world's highest inflation adjusted policy rates, which creates scope to lower borrowing costs even as many countries keep rates steady or push them higher amid elevated energy and food costs tied to the conflicts in Ukraine and Iran.
Several policy moves have helped keep a lid on prices: fuel taxes have been suspended since April and value added tax has been zero rated, though both measures expire on Sept. 30. A firmer kwacha has also helped. Although the kwacha has surrendered part of its advance versus the greenback this month because of demand tied to energy, farm-related imports, and general business needs, it remains Africa's top performer this year.
On growth, preliminary data show the economy expanded at a slower 7.2% pace in the second quarter, down from 7.6% in the first. The finalized GDP growth figure for 2025 came in at 5.4%.
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If inflation keeps easing and tax breaks roll off at month end, borrowing costs and price pressures could shift quickly. Add a strong but wobbling currency to the mix, and the next few weeks are important for where Zambia's rates and prices go from here.
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