FALLING INFLATION AND STRONG BOND DEMAND SHOW ECONOMY IS MOVING FORWARD – STATE HOUSE

State House Chief Communications Specialist, Clayson Hamaska says falling inflation and strong bond demands show Zambia’s economy is gaining strength and that investors have confidence in the direction the country is taking. The Zambia Statistics Agency (ZamStats) announced today that annual inflation dropped to 6.2 percent in August, down from 6.5 percent in July. Hamaska […]

State House Chief Communications Specialist, Clayson Hamaska says falling inflation and strong bond demands show Zambia’s economy is gaining strength and that investors have confidence in the direction the country is taking.

The Zambia Statistics Agency (ZamStats) announced today that annual inflation dropped to 6.2 percent in August, down from 6.5 percent in July.

Hamaska said the development is a major milestone.

He stated that When the UPND administration took office in 2021, inflation was at 23 percent.

The August figure now sits within the Bank of Zambia’s target range of 6 to 8 percent.

The positive inflation news comes days after the government held its first bond auction since the general election.

Investors placed bids worth K8.6 billion against K6.3 billion on offer an oversubscription of 37 percent.

Demand was highest for the seven-year bond, and the yield fell by more than one percentage point compared to the last auction.

“The drop in yields means “Zambia’s cost of borrowing is coming down, freeing up more resources for the services and investments that matter to Zambians,” Hamaska has told the media, in a statement.

President Hakainde Hichilema recently said the numbers prove that fiscal discipline is working.

“Lower inflation means your money goes further. Lower borrowing costs mean Government can do more with what it has. Both are the result of the hard choices we have made together over the past five years, and both tell us that the discipline is paying off,” the President stated.

President Hichilema added that the strong investor response was a vote of confidence in Zambia’s stability and its economic reforms” and that this would translate into “lower prices, cheaper credit and more opportunities for work.

Lower inflation and cheaper government borrowing will likely lead to reduced interest rates for businesses and households, and give government more fiscal space to fund health, education, agriculture and infrastructure, among others.

Francis Chipalo