Economist Trevor Hambayi has projected that Zambia is likely to continue experiencing the high cost of living which currently stands at over K10, 600 noting that there are no economic fundamentals that seem to be driving a reduction in the cost of living this year.
Aaccording to the Jesuit Center for theological Reflection (JCTR), the cost of living for a family of 5 is currently standing at K10, 603.40 as of March, 2024 from K 10, 307.01 recorded in February.
Speaking in an exclusive interview with the Zambian Business Times -ZBT, Economist Trevor Hambayi said it is unlikely that the cost of living will come down in 2024 as there seems to be not intervention measures being put in place.
Hambayi said the high cost of living will continue until the country reaches a greater degree of productivity to grow the gross domestic product (GDP).
He noted that the growth of the GDP will create macro stability in the exchange rate which will see a consistency in the prices of goods and services which will in turn reduce the cost of living.
He further attributed the high cost of living amid the current appreciation of the Kwacha to the prices of goods and services remaining constant.
“If you look at the economic fundamentals, we do not see any economic fundamentals that are speaking to be able to drive a reduction in the cost of living in 2024.So essentially in 2024, it is unlikely that the cost of living is going to be coming down,” he said.
“This general trend is going to continue until we can see a situation where the country is reaching a greater degree of productivity. This productivity is going to be measured by the GDP. So the GDP needs to grow before we can start to see the cost of living coming down. When the GDP grows, it will also create macro stability in the exchange rate and when there is that stability in the exchange rate, we will see a consistency in the prices of goods and services and that is what is going to create a level of reduction in the cost of living.”
“In terms of the cost of living is that the Zambian cost of living is being driven by the depreciation of the Kwacha. In the last month we saw that the kwacha had depreciated to K27 and what resulted from this was that the prices of goods and services were also increased. But in the last two weeks we have seen an appreciation of the Kwacha but what we do see is that the prices of goods and services have not reduced and that is why we continue to see an increase in the cost of living,” said Hambayi.
