Zambia’s inflation rate has remained unchanged at 16.7% for January 2025, signaling that while the country’s economy faces significant challenges, inflationary pressures are holding steady. According to the Zambia Statistics Agency (ZamStat), this rate is consistent with December 2024. It continues to reflect a sharp rise in the cost of goods and services. The rise is particularly noticeable in food.
ZamStat’s Acting Statistician General, Sheila Mudenda, explained the primary driver behind the inflation rate. She stated that the increasing cost of food has been the main factor. Food inflation for January 2025 rose to 19.2%, a slight increase from the 18.6% recorded in December 2024. Key contributors to this surge include higher prices for essential items such as bread, cereals, meat, fish, eggs, and sugar. These increases have placed additional strain on households already grappling with the rising cost of living.
In contrast, non-food inflation saw a modest decline, falling to 13.2% in January from 14.2% in December 2024. This decrease was attributed to price adjustments in non-food categories like furniture and furnishings.
Regionally, Lusaka Province continues to carry the highest inflation burden, contributing 4.1 percentage points to the overall 16.7%. The Copperbelt follows closely with a contribution of 3.9 percentage points. The rest of the provinces also showed varying impacts, with North-Western Province having the least contribution at 0.5 percentage points.
In addition to the inflation concerns, Zambia’s economy faces further pressure due to a widening trade deficit, which hit K3.3 billion in December 2024. This marks a stark reversal from a trade surplus of K1.1 billion in November 2024. The significant decline in exports, down by 14.2%, was the primary reason for this shift. Exports dropped from K31.5 billion in November. They fell to K27 billion in December. This drop was driven by weaker earnings from intermediate goods, raw materials, and consumer goods.
Imports, on the other hand, saw a modest decline of 0.4%, falling from K30.4 billion in November to K30.3 billion in December. The reduction in imports was largely attributed to a decrease in raw material imports (down 20.3%) and a drop in consumer goods imports (down 3.8%).
Despite the steady inflation rate, the country’s growing trade deficit highlights persistent challenges in Zambia’s export sector. Economists and policymakers will closely monitor these trends. The government continues to navigate the economic landscape for the coming year.
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