Zambia Inflation Slows to Two-Year Low on Food Prices

(Bloomberg) -- Zambia's inflation rate dropped to a more than two-year low in March as food and non-food price growth eased. 

Consumer prices rose 13.1% from a year earlier, compared with 14.2% in February, interim Statistician-General Mulenga Musepa told reporters Thursday in Lusaka, the capital. That's the lowest level since January 2020.  

Inflation has slowed from last March when it was at a five-year high due to the depreciation of the kwacha to an at least 28-year low which made imports more expensive. Food-price growth slowed to 15.3% in March, compared with 16% in the previous month, and non-food inflation decelerated to 10.3% from 11.8%. Costs rose 0.8% in the month. 

The slowdown in inflation for an eighth month may see the central bank's monetary policy committee keep the key interest rate unchanged for a second straight meeting in May. But it will need to assess the impact of surging agricultural commodities and oil prices, caused by the war in Ukraine, on its forecasts.

The economy expanded by an estimated 3.6% last year after a coronavirus-induced contraction of 2.8% in 2020, Musepa said. The southern African nation's worst slump in 26 years. 

Central bank Governor Denny Kalyalya said last month the policy committee sees inflation continuing to trend toward its 6% to 8% target range over the next eight quarters, averaging 13.2% in 2022 and 7.3% in 2023.

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