Zambian Economy Shows Strong Recovery as Inflation Falls Below 10%

Zambia's economic management has delivered impressive results, with inflation dropping to 9.4% in January, the first time below 10% since 2023. This achievement demonstrates the effectiveness of government policies in stabilising the economy and improving living conditions for Zambians.

The figures, announced by acting Statistician-General Sheila Mudenda, reflect a significant improvement from December's 11.2%, showcasing the administration's commitment to prudent economic stewardship.

The kwacha's outstanding 16% appreciation against the dollar since December highlights the success of strategic monetary interventions, including measures to regulate foreign-currency transactions. This currency strength, combined with favorable copper market conditions, has created an environment conducive to price stability.

Zambia's mining sector continues to demonstrate its vital importance to national prosperity, with copper comprising over 70% of export earnings, reaching record prices due to global supply constraints. This positions the country advantageously for sustained revenue growth.

The government's successful engagement with international partners has yielded positive outcomes, with the IMF recently approving a $190 million disbursement and opening pathways for additional support. This international confidence reflects the credibility of Zambia's economic reforms and fiscal management.

Food inflation declined to 10.9% from 12.9%, bringing meaningful relief to household budgets, while non-food inflation eased to 7.3%. These improvements across all categories demonstrate comprehensive economic progress.

The Bank of Zambia may now extend its monetary easing cycle, potentially reducing borrowing costs and stimulating business investment. This inflation success provides the foundation for sustainable economic growth while maintaining the administration's focus on achieving the central bank's 6-8% target range.