- Inflation drops to 11.9%, the lowest since August 2023
- Kwacha rallies 26% this year on copper surge and fiscal stability
LUSAKA, ZAMBIA – Zambia’s annual inflation eased to 11.9% in October, down from 12.3% in September, marking its lowest level since August 2023 and the sixth consecutive month of deceleration, official data said.
The Zambian Statistics Agency said food inflation slowed to 14.1% from 14.6% in September, while non-food inflation eased to 8.7% from 9.0%. On a monthly basis, consumer prices rose 0.4%, after a 0.5% increase in September.
Acting Statistician-General Sheila Mudenda said the slowdown was driven by lower food prices — particularly cereals, meats and soft drinks — alongside stabilised housing and transport costs. “The moderation in food prices continues to drive the overall decline in inflation,” Mudenda said during a press briefing in Lusaka.
Strong kwacha and copper windfall
The agency also credited the kwacha’s sustained appreciation for the easing trend. The currency has strengthened 26% against the dollar this year, making it one of Africa’s best-performing currencies. Officials attribute the rally to surging copper prices and improved fiscal management.
Copper, which accounts for more than 70% of Zambia’s export earnings, has seen its price climb above $10,800 per tonne in 2025. On Wednesday, three-month copper futures on the London Metal Exchange hit a record $11,200 per tonne, surpassing the previous all-time high of $11,104.50 reached in May 2024. The metal’s over 20% gain this year has boosted foreign exchange inflows and strengthened Zambia’s external position.
Global supply disruptions — including a mine collapse in Chile and flooding in the Democratic Republic of Congo — have tightened supply, offering Zambia an opportunity to expand its output. The southern African nation is on track to exceed 1 million tonnes of copper production this year for the first time in nearly a century.
Mining giants Barrick Gold and First Quantum Minerals are leading a $10 billion investment drive, with their $2 billion Lumwana expansion project expected to double production by 2028.
Policy outlook and economic prospects
Analysts say the steady slowdown in inflation could encourage the Bank of Zambia to cut its benchmark interest rate at its November meeting. The rate has remained at 14.5% since February, when it was last raised from 14%. A reduction would mark the first since August 2020.
Between February 2023 and February 2025, the central bank lifted rates by a cumulative 550 basis points to steer inflation back into its 6%–8% target range — a goal missed since May 2019. The bank projects inflation will return within range by early 2026, supported by a stronger currency, favourable commodity prices, fiscal consolidation and ongoing debt restructuring.
Falling inflation is expected to bolster Zambia’s recovery, with GDP growth forecast at 5.8% in 2025 and averaging 6.5% between 2026 and 2027.
