The year-on-year inflation rate has for the second consecutive month in a row recorded a reduction. For the month of July 2020, inflation slightly dropped to 15.8% from 15.9% recorded in June 2020 attributing the development to price decreases in food items.
Zambia Statistics Agency – ZamStats Statistician General Mulenga Musepa has disclosed during a media briefing attended by the Zambian Business Times – ZBT on July 30, 2020, that the annual food inflation rate for July 2020 was recorded at 16.1% compared to 16.3% recorded in June 2020 indicating a decrease of 0.2 percentage points.
He said this is attributed to reductions in prices of food items such as Cereals (Breakfast mealie meal, Roller mealie meal, Maize grain, Samp) and Vegetables (Rape, Tomatoes, Cabbage, Onions).
Meanwhile, the annual non-food inflation rate for July 2020 was recorded at 15.4% compared to 15.5% recorded in June 2020, meaning that on average, prices of non-food items increased by 15.4 % between July 2019 July 2020 and the slowing in the annual non-food inflation rate is attributed to price movements of purchase of Motor vehicles. Motor vehicles which are imported recorded a slight reduction on the slight gain in the Kwacha to US dollar trading pair.
Musepa further explained that at provincial level Lusaka made the highest contribution of 5.0 percentage points to the overall annual inflation rate of 15.8% recorded in July 2020, implying that the price movements in Lusaka Province had the highest influence to the overall annual inflation rate.
“Copperbelt Province has the second highest contribution of 3.0 percentage points while North Western Province had the lowest contribution of 0.5 percentage points,” He added.Price movements in the top three economically active provinces of Copperbelt, Lusaka and Southern provinces are key to the overall country inflation number.
For non-food inflation, the stability of the Kwacha is a key determinant as most of the items in the basket are imported. Zambia’s manufacturing base remains low and efforts to revive it are still to bear the desired fruits.
