Headline inflation in Africa’s second largest copper producer is pointing 50 basis points north of 10% fueled by rising cost push inflationary effects. Zambia currently grapples with currency weakness amidst rising risks to growth exacerbated by drought and hydrological risks that have manifested in load management to ease pressure off the electricity grid. This has caused business disruption and elevated the operating cost environment for the business environment.
Zambian consumers are bearing the brunt of power deficit effects that have transmitted to selling prices of food and non food items.
With a recent fuel price hike and a looming electricity tariff adjustment, inflation is forecast to widen even further in the immediate to medium term.
The Kwacha Arbitrageur
