Downward trend in Zambia inflation ends as currency impact wanes

Consumer prices rose 9.9% in July from a year earlier, compared with 9.7% a month prior, interim Statistician-General Mulenga Musepa told reporters.
Image: Gianluigi Guercia/AFP/Getty Images

Zambia’s inflation rate climbed for the first time in about a year as the effects of a stronger kwacha in keeping costs in check wanes.

Consumer prices rose 9.9% in July from a year earlier, compared with 9.7% a month prior, interim Statistician-General Mulenga Musepa told reporters Thursday in Lusaka, the capital.

The acceleration in inflation may prompt the monetary policy committee to hike rates when it meets next month and revise its forecasts. The central bank projected in May inflation will average 12.5% this year and decline toward its target range of 6% to 8% by the end of 2023.

A 33% gain in the kwacha in the year through June helped to contain price increases up until last month, even as supply shortages stemming from Russia’s war with Ukraine, the lingering effects of Covid-19 lockdowns and extreme weather sent food and energy costs surging.

The main contributors to the uptick were cooking oil, diesel and gasoline. Annual food-price growth quickened to 12% in July, compared with 11.9% the previous month, and non-food inflation accelerated to 7.2% from 6.9%. Monthly inflation slowed to 0.4% from 0.9% in June. That’s the lowest level since October.

© 2022 Bloomberg

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