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Zambia Inflation Nears Three-Year High as Food Prices Spike - BLOOMBERG
(Bloomberg) -- Zambia’s annual inflation rate climbed to an almost three-year high in October as the nation’s worst drought on record kept prices of meat, corn and cereals sticky.
Consumer prices rose 15.7% from a year earlier, compared with 15.6% in September, acting Statistician-General Sheila Mudenda told reporters Thursday in Lusaka, the capital. That was the highest rate since December 2021.
The International Monetary Fund expects inflation to continue to accelerate because of the depreciation in the kwacha, which has weakened almost 4% against the dollar this year. Increased food and electricity imports have also fanned price growth.
An El Niño-induced drought gripped Zambia earlier this year, slashing agricultural output and constraining hydropower generation — its main power supply. Households and businesses receive three hours of electricity a day at most.
The drought also prompted the IMF to trim its 2024 growth projections to 1.2% from 2.3%. That would be the economy’s slowest expansion in 25 years barring the contraction in 2020 at the height of the pandemic.
The acceleration is unlikely to persuade the central bank to increase interest rates on Nov. 13 to help support the economy. It has also previously said inflation is supply-driven.
Non-food inflation, a sign of underlying price pressures, slowed to an annual 12.2%, from 12.4% last month. Food-price growth quickened to 18.2% in October from 17.9%.
(Updates with detail on drought from fourth paragraph.)
