Zambia Inflation Quickens For The First Time in Four Months
Zambia Inflation Quickens For The First Time in Four Months
(Bloomberg) -- Zambian inflation quickened for the first time in four months in September.
Consumer prices rose 15.7% from a year earlier, compared with 15.5% in August, Mulenga Musepa, the interim statistician general at the Zambia Statistics Agency, told reporters Thursday in Lusaka, the capital. Costs increased 1.4% in the month.
The increase in the headline rate was due to non-food items, such as vehicles, furniture and housing, Musepa said. Annual food inflation slowed 14% in September from 15.5% a month earlier. Price growth has been above the central bank’s target band of 6% to 8% for more than a year and may accelerate following the continued depreciation of Zambia’s currency.
For the year to date, the kwacha is worst performer on the continent, having lost more than 29%. In addition to fueling inflation, it’s driven up external debt-servicing costs, raising risk of a default.
Zambia this week became the first African country to ask bondholders for relief since the onset of the coronavirus. The government is seeking to defer interest payments on its $3 billion worth of Eurobonds until April as it battles the economic contraction and liquidity squeeze caused by the pandemic.
Gross domestic product contracted an estimated 2.1% in the second quarter, following a decline of 0.3% in the three months through March, Musepa said.
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