Zambia, Africa’s biggest copper producer after the Democratic Republic of Congo, will miss a government year-end inflation target as higher fuel, power and food prices boost costs, a central bank official said.
Inflation will end the year at “slightly below” 8 percent, Francis Chipimo, an economics director at the bank, said in a speech today in Lusaka, the capital. Finance Minister Alexander Chikwanda in October set an inflation target of 6.5 percent for the end of 2014. The Finance Ministry last month projected inflation would reach 7 percent by Dec. 31.
Gains in Zambian consumer prices quickened to 8 percent in August from 7.1 percent in December. A currency that depreciated by as much as 27 percent from the start of the year to May also helped drive up inflation in the land-locked southern African nation, prompting steps by the Bank of Zambia.
“When we were taking steps earlier in the year to tighten, we tightened in a very deliberate way,” Chipimo told reporters later. “Equally, when you’re looking at how things are developing we want to move in a measured way.”
The kwacha has reversed some of its losses, and traded at 6.14 per dollar as of 10:19 a.m. in Lusaka after reaching an all-time low of 7.04 in May.