ECONOMIST Chibamba Kanyama has predicted an increase in inflation rate for the month of June owing to the continued geopolitical tension between Russia and Ukraine.

In an interview, Tuesday, Kanyama said he would be surprised if inflation levels continued to drop when the country was already experiencing an increase in commodity prices.

“The unfortunate thing is the geopolitical crisis of Russia and Ukraine; this will affect global prices all over. And my expectation for Zambia is that by June’s announcement of inflation levels you [will] begin to see a rise. If you don’t see it this month of April you will see it in May and June. I will be surprised, really surprised if inflation levels continue reducing when we are already experiencing prices going up. It is evident by prices, you don’t have to be told by our statistics agency to know whether inflation is rising or not,” he said.

“The rate of inflation is beginning to rise, you already see, you take Ole, just cooking oil the price has already gone up, transport costs have already been adjusted upwards. So all this is as a result of geopolitical crisis brought by the fuel impact.”

He said despite the Bank of Zambia’s intervention through increased monetary policy rate, the country would reach a point when such intervention would not have an impact.

“So even if the central bank, the Bank of Zambia has intervened by increasing the monetary policy rate, there is a point at which the impact of the rate begins to be compromised because the rate of price increase will be higher than the reduction in cash circulation. Because monetary policy rate is put in place to reduce credit, so when there is a reduction in the demand for credit there is less liquidity into the system. And therefore, you begin to see the reduction in the price levels. Unfortunately, there is a point at which that cannot have an impact anymore and this is where we are getting into,” said Kanyama.

“So I already know given what has happened in terms of fuel increases [that] the inflation rate will begin to climb upwards again. So it is not only Zambia it is really an issue that you find everywhere, all countries that import fuel.”