Energy Tariff Adjustments Pose Growth Headwinds

The anticipated energy tariff adjustments, projected to add 150–200 basis points to Zambia’s headline inflation in Q3/Q4, present notable risks to the country’s near-term growth outlook.

Higher energy and transport costs will directly impact household budgets, reduce consumer spending power and raise operational costs for key sectors including mining, manufacturing, agriculture and services.

These pressures, combined together with the likelihood of a continued tight monetary policy stance, could slow private sector activity and investment momentum.

Preliminary estimates indicate this could trim 0.3–0.5 percentage points from real GDP growth over the next 12 months.

Without productivity improvements or targeted mitigation measures, the economy may experience slower job creation and a delayed post-inflation recovery.