Zambia’s Q1 Records Positive Growth, Yet Cost of Living Crisis Persists
Zambia’s economic performance in Q1 2026 reflects a gradual but still fragile recovery.
Growth is estimated at around 5.0%–5.2%, driven by mining expansion, improved electricity supply and resilience in services.
Inflation declined from 9.4% in January to about 7.1% in March, moving toward the 6–8% target range, allowing the policy rate to ease to around 13.5%.
The Kwacha showed relative stability, appreciating by an estimated 3%–5% on average, supported by improved forex inflows, although trade volumes contracted by about 6%, highlighting external vulnerabilities.
However, cost of living pressures remain high, especially food prices, limiting household purchasing power.
Lending rates remain above 20%, constraining private sector growth, while fiscal pressures and election-related spending risks threaten stability.
Overall, Q1 signals macroeconomic stabilization with weak household transmission, requiring fiscal discipline, diversification and targeted cost-of-living interventions.
