THE annual rate of inflation has decreased to 15.9 per cent in June, down from 16.6 per cent recorded in May, mainly triggered by price decreases in food items, according to the Zambia Statistics Agency (ZSA).
Announcing Zambia’s annual rate of inflation for the month of June, ZSA Interim Statistician General Mulenga Musepa said that the reduced inflation this month was largely attributable to decreased food prices amid the country’s first bumper harvest since the 2016/2017 agricultural season.
“The year-on-year inflation rate, as measured by the all items Consumer Price Index (CPI) for June, 2020, decreased to 15.9 per cent from 16.6 per cent recorded in May, 2020. This means that on average, prices of goods and services increased by 15.9 per cent between June, 2019, and June, 2020. The decrease in the annual rate of inflation was attributed to price decreases in food items,” Musepa told journalists via video conference in Lusaka, Thursday.
He added that there was a significant decline in the food inflation rate, which dampened the overall annual rate of inflation, largely driven by price reductions in basic food items, such as mealie meal and fish.
“The year-on-year (annual) food inflation rate for June, 2020, was recorded at 16.3 per cent compared to 17.5 per cent recorded in May, 2020, indicating a decrease of 1.2 percentage points. This development was mainly attributed to reductions in prices of food items, such as cereals (Breakfast mealie meal, Roller meal, maize grain) and fish (i.e. dried bream, dried Kapenta, Bukabuka and fresh Kapenta,” Musepa said.
“The year-on-year non-food inflation rate for June, 2020, was recorded at 15.5 per cent same as recorded in May, 2020. This means that on average, prices of non-food items increased by 15.5 per cent between June, 2019, and June, 2020.”
Of the total 15.9 per cent annual inflation rate recorded this month, food and non-alcoholic beverages accounted for 8.7 percentage points, while non-food items accounted for 7.2 percentage points, according to Musepa.
ZSA data shows that although Zambia’s annual rate of inflation declined to 15.9 per cent in June, 2020, it still remains at a near four-year high since September, 2016, when inflation was at 18.9 per cent, reducing to 12.5 per cent in October, 2016, before it dropped to close that same year at 7.5 per cent.
The BoZ has projected that the country’s annual rate of inflation will remain high over the forecast period of eight quarters up to the end of next year, mainly driven by high food prices, but is due to slow down on the back of a maize bumper harvest.