Zambia’s annual inflation rate fell to single digits in January, reaching 9.4 percent, marking the first time in three years the rate has dipped below 10 percent. The decline signals easing price pressures and strengthens expectations for continued monetary policy easing in the Southern African nation.
Data from Zambia’s Central Statistical Office shows that inflation eased from 11.2 percent in December 2025 to 9.4 percent in January 2026. The reduction was driven by slower price growth across both food and non-food sectors. Annual food inflation fell to 10.9 percent from 12.9 percent, while non-food inflation slowed to 7.3 percent from 8.7 percent. Month-on-month inflation recorded a modest increase of 0.5 percent.
Brandspur Banking News Desk reports that the sustained decline in consumer prices is expected to encourage the Bank of Zambia (BoZ) to continue its rate easing strategy when policymakers meet in February. In November 2025, the central bank reduced its policy rate by 25 basis points to 14.25 percent, marking the first cut since August 2020. Analysts anticipate further easing as inflationary pressures remain moderate.
Despite the positive trend, Zambia’s inflation remains above the BoZ’s target range of 6–8 percent, which it has consistently exceeded since May 2019. A contributing factor to the moderation is the strengthening of the kwacha, which has appreciated by roughly 16 percent against the US dollar since December 2025. The local currency’s performance has been supported by central bank measures limiting foreign-currency use in domestic transactions and surging global copper prices.
Copper exports, accounting for over 70 percent of Zambia’s foreign exchange earnings and about 25 percent of government revenue, have reached record highs amid supply disruptions and global ore shortages. The boost in export revenue has helped contain domestic price pressures, further supporting inflation moderation.
In a parallel development, the International Monetary Fund (IMF) approved a disbursement of approximately $190 million to Zambia, concluding the current financing programme and paving the way for negotiations on additional support. This financial backing is expected to provide stability and reinforce ongoing macroeconomic reforms.
Economic analysts suggest that if inflation remains on this downward trajectory, Zambia could see a more predictable cost-of-living environment, encouraging private investment and improving household purchasing power.
