from ARNOLD MULENGA in Lusaka, Zambia
LUSAKA, (CAJ News) – INFLATION shooting to an all-time high in 19 years and the local Kwacha currency sliding in value against the greenback in recent months, as well as the impact of the pandemic, Zambia’s economy is going through turbulence.
Annual inflation accelerated to 24,6 percent in June from 23,2 percent year on year in May.
According to the Central Statistical Office, food inflation, which printed at 31,2 percent y/y, continues to be a factor with global food prices increasing by 17 percent this year and thus having a direct bearing on the consumer price index (CPI) basket.
The currency weakness continues to feed into inflation with the unit having lost 7 percent of its value against the United States dollar this year.
The CSO also released the first quarter 2021 gross domestic product (GDP) numbers, which showed that the economy registered modest gains of 0,7 percent y/y compared to -2,4 percent in the fourth quarter of 2020.
The agriculture, forestry and fishing sector contributed the most to growth having registered 14,5 percent growth while mining and quarrying fell by 2,2 percent despite the recovery in copper prices internationally.
Rand Merchant Bank maintained its growth expectations for 2021 at 2,4 percent y/y as the economy continues on its path of recovery from the effects of the pandemic.
“Key to Zambia’s recovery is the pace of vaccinations, which started in April and are expected to increase substantially over the rest of this year,” the bank stated.
The International Monetary Fund projects growth of 0,6 percent.
– CAJ News