Sustaining Inflation Control Measures While Balancing Economic Growth
The conversation around inflation and growth is evolving, and rightly so. This binary narrative between maintaining price stability and promoting economic expansion deserves deeper reflection, especially within the current economic landscape that is being reshaped locally, regionally, and globally. It is a matter of strategic interest for policymakers, economists and stakeholders alike.
Zambia, like many developing economies, faces a recurring dilemma: how to stimulate meaningful economic growth without igniting inflation.
In response, central banks often opt to restrict liquidity as a safeguard for price stability. However, this conservative stance frequently comes at the cost of job creation, private sector activity, and broader economic dynamism.
At the same time, the global dominance of the U.S. dollar continues to distort domestic markets and reduce monetary independence across the developing world. This further limits the policy space available to African central banks to respond effectively to local challenges.
But the solution is not less liquidity, it is smarter liquidity. Fighting inflation should not eclipse the broader developmental mandate. If money supply growth is strategically aligned with productive investment especially in agriculture, small enterprises and infrastructure. Zambia can expand economic output in tandem with growing demand and this alignment naturally as it helps to contain inflationary pressures.
Inflation is not inevitable when liquidity is targeted, efficient, and growth-driven. For Zambia to achieve inclusive and sustainable development, our macroeconomic strategy must prioritize liquidity for productivity, not austerity for stability or macroeconomic balance.
