Zambia Interest Rate2021 Data | 2022 Forecast | 2001-2020 Historical | Calendar

The Central Bank of Zambia raised its key interest rate by 50 bps to 9% at its November 2021 meeting. It was the first rate hike since February, to anchor inflation expectations, while supporting economic growth and financial stability. The Committee said that although inflation would decelerate sharply over the next eight quarters, it is likely to remain above the upper bound of the 6-8% target range. Zambia’s annual inflation eased to 21.1% in October from 22.1% in September and down from a peak above 24% in June; and it is projected to average 22.6% in 2021, before declining to 15% in 2022 and 9.3% in the first three quarters of 2023. The bank raised its growth projections for 2021 to 3.3%, from a modest 1.6% in September, on the back of strong performance in agriculture, information & communication and wholesale and retail trade. In 2022 and 2023, growth is expected to rise to 3.5% and 3.7%, respectively.

The central bank of Zambia left its key interest steady at 8.5 percent on September 1st, to support financial stability and growth, allowing the last rate adjustment to take full effect on the economy. The real GDP is projected to grow by a modest 1.6 percent in 2021 and strengthen over the medium-term, while the inflation rate is expected to decelerate faster than earlier projected but to remain above the 6-8% target range over the next eight quarters. Inflation is estimated to average 22.6 percent, 15.5 percent and 11.9 percent in 2021,2022, and the first half of 2023, respectively. Finally, the bank's governor said an agreement on an IMF lending programme and stronger fiscal adjustment remained critical for Zambia to restore macroeconomic stability. Zambia failed to keep up with international debt servicing payments in November, becoming the first African nation to default on its debt in the pandemic-era.

The Central Bank of Zambia left its key interest rate steady at 8.5% at its May 2021 meeting, to support financial stability and growth, allowing the last rate adjustment to take full effect on the economy. The real GDP is seen recovering faster than earlier projected on the back of strong performance in information & communication, electricity, education and public administration. The inflation should remain above the upper bound of the 6-8% target range over the next eight quarters, but inflationary pressures are now expected to subside more quickly than envisaged in February's meeting on account of a good crop harvest, higher copper prices and improved external financing. Inflation is estimated to average 21.9% and 16.7% in 2021 and 2022, respectively. Finally, the Bank stressed that the implementation of fiscal adjustment measures in line with the Economic Recovery Programme and understandings reached in discussions with the IMF remain critical to anchor macroeconomic stability.