Zambian inflation rises 0.5%

By James Kunda

LUSAKA, Zambia (AA) - Zambia’s inflation rose 0.5% in May to an 18-year high on Thursday because of increases in the cost of meat, fish, and other foods.

Interim statistician-general Mulenga Musepa told reporters that consumer prices rose 23.2% from a year ago, compared to 22.7% last month.

“Costs increased 2% in the month. Annual food inflation quickened to 28.5% in May from 27.2% in April,” he said.

Inflation in Africa’s second top copper producer remains above the central bank’s target range of 6% to 8% and is expected to remain upper bound until the middle of 2023, according to a recent report by central bank governor Christopher Mvunga.

The southern African nation is asking the International Monetary Fund for a bailout package that could be crucial in restoring fiscal health.

Economist Lubinda Haabazoka said Thursday that continued inflationary pressures were due to the Kwacha’s weakness against a bullish dollar and other major convertible global currencies.

The Kwacha opened trading Thursday at K22.5 to $1.

“Zambia continues to import goods at high prices charged by the exporters and this is further weakening the value of the Kwacha and raising inflation,” he said, adding that a deal with the IMF and other cooperating partners such as the World Bank was an urgent, albeit short-term, solution.

Crucially copper prices continue on a brighter trajectory, with a ton fetching around $9,940 on the London metal exchange Thursday.

It could help boost foreign exchange reserves and improve the Kwacha’s outlook to ease inflationary pressures.