Zambia: The statistics agency yesterday reported that inflation had increased to 10.8 percent y/y in August from 10.3 percent in July.
The outturn surprised to the upside relative to our expectation of 10.4 percent. This was attributed to movements in both food and non-food items, which increased from 12.1 percent y/y to 12.6 percent y/y and from 7.8 percent y/y to 8.5 percent y/y, respectively. The largest increase was in the transport sub-component, which rose to 13.3 percent y/y from 10.6 percent in July.
The Energy Regulation Board (ERB) of Zambia hiked fuel pump prices by an average of 15 percent yesterday – prices will be effective from 1 September. This is in line with the regulator’s cost-reflective model, which tracks international oil prices and currency movements. The recent increase coupled with other upside risks (electricity prices, maize prices and currency pass-through) support our view for an upward trajectory in the inflation profile. The recent outturn has pushed our end-of-year inflation estimate to 11.3 percent and our peak to 11.7 percent in January 2024.
