Inflation Likely to Remain in Double Digits Through 2025 – Analyst Warns
Zambia’s inflation rate is expected to remain stubbornly high throughout the year, despite a gradual slowdown in price increases, says economic analyst Kelvin Chisanga.
Mr. Chisanga, offering his latest economic insight, noted that while there are signs of disinflation — a reduction in the pace of price increases — significant factors continue to hinder a major drop in inflation to single digits. He cast doubt on projections suggesting inflation could dip below 8% before the year ends.
“I highly doubt that we will soon record anything below 8% in inflationary readings,” Chisanga said. “Many complex and interconnected factors are at play, making it difficult for price growth to cool down significantly.”
However, he added that the recent slowdown in inflation still offers some consolation, as rates are gradually edging toward the Bank of Zambia’s target range.
“It is encouraging to see inflation anchoring within double digits, moving closer to policy targets. This should be seen as a positive direction,” Chisanga emphasized.
Despite this cautious optimism, Mr. Chisanga warned that Zambia is “not yet out of the woods,” citing ongoing macroeconomic challenges. Key among them are the limited strength of the local currency and the continued energy supply deficits, both of which have ripple effects on overall price stability.
He further pointed to the role of evolving policy measures and external shocks as critical factors shaping the inflation trajectory.
“The domestic currency still has limited room to appreciate significantly, and energy challenges remain unresolved. These factors must be addressed if we’re to see inflation fall within the desired corridor,” he concluded.
The Bank of Zambia has maintained a tight monetary policy stance in recent months in a bid to rein in inflation, targeting a medium-term rate between 6% and 8%.
