Thursday, March 28, 2024

Inflation soars into double digit figures

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The annual inflation rate has recorded a double digit from 9.8 percent in March 2008 to 10.1 percent in April, 2008.

The annual rate of inflation, as measured by the all items Consumer Price Index (CPI), has been recorded at 10.1 percent as at April 2008 representing a 0.3 percentage point higher than last month.

Director of Census and Statistics Efreda Chulu, who announced the development at a press briefing in Lusaka today, attributed the growth in the inflation rate to increased prices of food, beverages, tobacco, rent and household energy, furniture and other social amenities.

Ms Chulu said the increase of 0.3 percentage points in the annual inflation rate from 9.8 percent in March 2008 to 10.1 percent in April 2008 is largely attributed to the increase in the cost of food products.

She said this is because of the total 10.1 percent annual inflation rate in April 2008, food products accounted for 4.8 percentage points while non-food products in the Consumer Price Index accounted for a total of 5.3 percentage points.

The annual food inflation rate was recorded at 9.8 percent in April 2008, compared to 9.1 percent in March 2008 and contributing to food inflation were increases in the cost of maize meal, cereals, cooking oil and milk products.

And Zambia has recorded a Trade Surplus in the International Merchandise Trade valued at K346 billion.

The growth in the International Merchandise Trade has revealed that the country exported more products in March than it imported in value terms.

Director of Census and Statistics Efreda Chulu said during a monthly CSO bulletin presentation that the total value of exports in March 2008 was K1, 615.5 billion compared to K1, 487.9 billion in February 2008.

Ms Chulu stated that the most prominent exports were manufactured goods classified chiefly by material which accounted for 82.7 percent in March and 83.1 percent in February 2008, of which refined copper was the most significant export item.

She further cited Switzerland, Egypt, South Africa, Democratic Republic of Congo and China as some of Zambia’s major export destinations by products in March 2008.

46 COMMENTS

  1. enlightened Zambians,Economists you who from the days of late Ronald Penza have been using terms like Macro & micro which don’t help an ordinary citizen.Please explain to us how GRZ will avert this world food prices crises from affecting our people.

    I mean world fuel prices are on record high,GRZ seems not to have political will to remove excise duty & VAT on fuels so that you & i can have less pressure.’Cause fuel has this bad effect of affecting every area of the economy.Salaries remain low while on average an employee in Lusaka speeds K200,000 just on transport.
    If u have a car it’s K7,200 per little & it doesn’t go far.

  2. it is interesting to note that if you used the RPI as opposed to the CPI, the inflation figure and trends would be significantly different!!! one thing i have learnt about govt. published statistics is that alot of “gymnastics” are performed before the rest of us laymen are availed the “facts” !!!!

  3. We need to be realistic though about expecting govt to do much about this. Western countries are also reeling from high gas and food prices so sobriety and rational perspective must be maintained here while the country navigates these problems. Infact the impact on poor countries like ours with a large dependence on grain and fossil fuels is liekly to be grave, food riots have already errupted in some parts and one govt has been toppled by rampaging masses, this is a serious issue folks

  4. #3, when the $112-$117/barrel of crude oil hits our economy i sincerely hope your mature comment is reflective of the action to be taken by the majority!!! our economy is in a fragile recovery state and these adverse world economic conditions are going to hit us the hardest!!! we must brace ourselves !!!

  5. amapepala yena balalandapo sana but no plan and practical achievements from the GRZ.to me it looks like a common zambian is not considered by the GRZ

  6. EMK, fuel in Chingola is K7,700 PER litre.
    In Botswana fuel is P3.14 per litre which is equivalent to K1,800 bcos of it’s govt’s removal of VAT and duty on fuel.
    But why not Zambia????????

  7. #6 Alex.the GRZ has no other source of income.chimoneka kwati if they removed tax from fuel teti balwebwino so for them to make more money for there pockets they have refused to remove tax from fuel.yalikosa bakamba pa zambia

  8. Ladies and gentlemen, the global credit crunch has affected practically each nation. It actually isnt surprising that inflaton has gone up..just hope the rates decrease or the crunch loosens its grip.

  9. What a phoney country!Are these economists in this country really educated in the area they are featured?Hey, you genuine learned, please help us.The Kwacha lately has has gained too much compared to other major currencies,but what is happening to our hogwash inflation?Is a currency no part of this inflation?I see it now not to be synonymous.These propagandists are just a crop of sellouts who can not even understand a single thing in our economy.Flash them out please!

  10. This economy is no longer exciting but demoralising. Maganda/Fundanga please siphone these excess Dollar and Re-invest them into Capital Invetsment and infrastructure instead of watching our exporter go down. we need to create a vibrant market where both exporters and importers remain bullish. this is definitely not the case. Let us have a stable Exchange rateplease which allows long term projection. Rapid Appreciation is as bad as depreciation in a macro economy depending on Export and import markets

  11. Nyebo mulabeja. The ones in control of the world economy are just playing with you and at times even laugh at you when you say we shall bring down inflation. When they press the right button abit you starting dancing to their bitter tune. The Zambian economy still depends on external funding. This time we are complaining of fossil fuels and food while they have already speculated that is those in control and have a vision that next year ownwards it be high cost of clothes. Muyotalika kusama zipaya meaning we shall start wearing animal skins. Those game animals will be both source of meat and skins for wearing to replace synthetic and cotton products.Tighten your belts.

  12. Im sure everyone is familiar with the Philips Curve. Basically this is the relationship between the unemployment rate and the inflation rate. This inflation rate does not surprise me at all, in fact it was expected. What im going at is that so far we have heard so called news about economic growth. This means more people are on payroll, if you have more people on payroll, more people will demand commodities, in this case food is the most demanded. For retailers or manufactures to tackle the demand, they’ll have to raise prices so as to filter out some consumers so as to meet demand. This is usually what will take place in the short run, however in the long run, producers will produce more

  13. cont…
    due to an increase in price which will once again drop prices so as to reach equilibrium. So its a cycle. However you also have other exogenous factors contributing to the inflation rate. This includes stuff like rising oil prices, electricity problems which is hurting the agriculture and manufacturing sector. So so many things are contributing to the inflation rate. The trade surplus is a good thing though. The way to solve it, importation of food stuffs to satisfy the demand, however it should be controlled importation so as it should not hurt our manufacturing sector. On the oil part, govt is already sorting that out

  14. cont…
    by trying to set up an oil refinery that’ll be able to refine oil from Angola since our current one cannot. On the power part, that’ll depend on Zambians themselves. Zambians can tackle this problem by importing Desiel (i dont think thats the correct spelling) generators for manufacturers. This will be enough since load shedding is for about 2 hours. Also importing solar panels. This will be enough for offices (i dont mean offices like FINDECO, Small offices). That can just be a few ways of tackling the inflation rate. If i’ve left out any, you are free to contribute or correct me.

  15. Crazy Zambian your first sentence defies logic. “i’m sure everyone is familiar with a philips curve”. It’s like me talking of 16bit 4:1 real-time compression threshold -10dB. I don’t expect the layman to understand.

  16. #16
    Ok, i apologize for the statement but im sure you’ll get the logic in what i have to say. I do however give a brief description of what it deals with. And that is the relationship between unemployment and inflation. However i apologize.

  17. I am not an economist but I can say that the Zambian economy is just a microcosm of the world economy. We Zambians neither shape no influence the world’s nor our own economy. The government has neither the strategy nor the capacity to do anything about the economy. Unfortunately, for all his intellect, Dr. Fundanga is just a figurehead. The banks and Mining companies are the one that are pulling the economic strings. Zambia is suffering the double whammy of a strong Kwacha and rising inflation. Soon people will start losing their jobs. Levy, Magande, Fundanga and the rest of the goons will be mere spectators.

  18. Crazy Zambian a brief comment on your analysis. Firstly Zambia’s economic growth and lower inflation have not resulted in decreasing unemployment so the country’s payroll aggregate has not actually grown,i dont have a figuer but my best guess is that job growth has been flat of very minimal at best. Your point on trade, Zambia again does not have a net trade surplus, we sill consume (and import) a lot more than we produce (and export). Zambia’s current positive monetary indicators have resulted from a combination of the massive debt write down that came with HIPC which has eliminated the need for the huge outflows that used to go towards debt servicing, greater discipline with govt internal

  19. #16, i understand what you mean about those mangisho. Fact here is we’re looking at a government short of ideas, huge on bark but low on bite.

  20. borrowing and a spike in copper prices that has brought a windfall to the treasury from resulting taxes. Plus we had a grain surplus that helped the country to avoid grain importation which usually exerts pressure on inflation. finally, Fundanga has done a sterling job in managing nominal money supply. These factors together have helped Zambia to post good numbers on the monetary side, but as is always contended, these issues do not register a direct immediate impact on the povo and this is where the challenge is because you still see serious poverty and deprivation everywhere

  21. folks ps read #19 in conjunction with #20 because it seems Struggling comedian was hitting the keys simoultaneously with me

  22. Well it is the job of government and the central bank to contral intlation. But in Zambia it seems the market does the job. Who is not affected and worried by high fuel prices? China?? America??? Europe??? Botswana??? Australia??? Guys its everyone’s problem. There is no excuse of Zambia being a third world country and lay back that things are ment to be stiff for us. Fundanga and his mates at BOZ and government need to use their heads everyday, thats why they get fat cheques. They should not just sit and speculate the odvious.

  23. #21
    I have loved your contribution. It gives me goos bumps to discuss economic policy. I do however think the inflation rate was still expected as we are having oil prices rising and there are electricity problems in the country. If its not a rise in employment that has caused inflation then its oil prices and load shedding.

  24. People, we must realize that food prices will continue to soar and no single country on earth will be spared. The only hope brothers and sisters and those who have doubted Jesus’ words, is realize that we are rapidly entering a phase described as “pestilences and famine”. Havent you seen that countries like america are also crying foul and even Japan is increasing prices on various foods.
    JESUS IS THE ANSWER MY FLOKS. JUST HAVE HOPE AND BELIEVE IN HIM AND YOU WILL NOT BE ANXIOUS FOR NOTHING

  25. Yo enigma even though you are baffling me right now with you phi lo let me just remind you dat jesus helps those who help themselves so you cant just sit and kick back hopping jesus will help we must work our ass out and see how we can bring this situation to an equilibrium point where demand and supply will work themselves out aight man so zedians i know there are some brainy at over here but lets break this down so dat common people like me can understand no jargon please….am out hats out and peace…

  26. Yes, believe in jesus and the inflation rates will drop to single digits again? God will command Nevers Mumba to strick a rock with his walking stick and it will bring forth pure diesel country?

  27. No. 26 ENIGMA, i dismiss ur perspectives on the current global crises as mere fantasies, and would have this forum believe u are on the brink of lunacy, who are u to dilute ppl of sound mind that religion is the cause of present short comings? lets be objective here, the cause of this economic malaise must be correlated to the rise in price of the worlds most consumed commodity i.e OIL. The shot callers in OPEC are out to reap enormous profits hence undervaluing the dollar. This triggers a rise in the price of oil, costs of goods and services ultimately offsetting economic trends in other countries……..RELIGION? Lenin said it was the opium of the masses and should be dealt with

  28. cont…. personally, in essence what he meant was; if u cant tell that u are being fcuked the simple solution 2 ur problems is to find comfort in the supposed fact that god loves u or cares for u…. i mean it is not a bad solution if u are a poor person or u are dull but 4 a person who works @ the ministry of education u must know this

  29. Its amazing how the government cannot think to create jobs and industries for the country men and women so that we can export more and import less so as to reduce the rate of inflation.Almost all comodities sold in zambia are imported and with this being the case there has to be a rise in inflation rates.Did anyone do economics in the government????

  30. Read Newsweek Magazine 14th April and see how these powerful people not NATIONS, people are playing around with you and me!

  31. Very interesting reading pipo’s views on religion.I’m a Christian myself but when another Christian misinforms/mis courts scripture, yes Christ told about wars & rumors of wars,pestilent but that should not cause you to fold your arms & go to sleep.The bible encourages us to work hard, “A little sleep a little slumber,a little folding of the hands & poverty will come on you like a flood”.

    Let us discuss inflation in as much as Christ is supreme over all but lets not mis court Him!!!

  32. ‘…MK 500 approximately ZK 20,000 )….” shame! on us in the COMESA region we have the highest exchange rate from zimbabwe, in kenya,uganda,Sudan is 65ksh,1750ush & 200SDP respectively the others we cant even talk.The govt should consider dropping one zero from our useless kwacha like the Nigerians did then it can be K380 instead of K3800 to a dollar.Its shamefull t even say your rate to other foreigners.
    BamaGANDE TWAFWENIKO UKUSEBANA???

  33. #33 I think as a nation/Africans,its about time we moved away from external help & have our own home grown policies.I mean it’s these foreign world bank & IMF initiatives that got us in this mess in the first place.Koffie Anani brought out some power points yesterday,what Africa needs is a green revolution(feed itself)What makes America so powerful?Because,it can feed itself plus others.If you’ve grown up in Zambia you’d agree that back in the days at school,the child who came with food,& other nice things was the popular one,other kids would even carry his bag.If we can feed ourselves & have enough to feed other nations also,then shall we have a strong voice.

  34. The only time the appreciation of the kwacha will make since is if we see it reflect in goods & service being also reduced.I mean what’s the point in talking about economic growth when peoples livelihood are not improving?UTH & other hospitals are still pathetic & these politicians shamelessly appear on TV & say we are doing well.Do they live & see the Zambia that we see?I guess not,coz fuel is free,accommodation,school fees GRZ sorts them out.And when they are sick,instead of using the same hospitals they say are ok,they are quickly rushed the Morning Side in SA.They make me feel like throwing up!!!These bunch of no goods!!!!!!!!!!!!!!!!

  35. I must admit that i have enjoyed your wise contributions from all of you. Your opinions, observations etc are mature and soothing. That is the spirit of Zambians, not insults.
    The situation Zambia has found herself in, is however sad. I totally agree with my Compatriots who say Zambia does and cannot change the ball-game of the world economy. America, where this recession started from, has no long term answer to this problem. For weeks now, the government of the USA has been grappling with the issue, but often the solution has elluded it.
    Yes, we needed to plan, but we shouldn’t forget where we have just come from – 27 years of a commandist economy and to turn the economy around of any

  36. cont’d
    given country from disaster to where we are is no mean achievement. May the good LORD blessed all of you and enjoy your week end.

  37. This is probably the most mature/enjoyable blogging on LT yet. Thumbs up to all positive contributors about pointers to improve Zed economy.

    Someone referred to the ‘Phillips Curve’ to explain the situation in Zed today. This model was dealt a severe blow post 70s/80s world economic recession (due to high rises in oil prices, just like now) by a new phenomenon coined ‘stagflation’ i.e. existence of a recession/hyper-inflation in an economy at the same time.

    Stagflation’s difficult to address using conventional intervention methods like cutting/increasing interest rates, especially if cost-push factors are encountered e.g. increasing oil prices . This is why even US has difficulties.

  38. Despite the gloom about the exogenous factors affecting our inflation figures, I think there is something that we can do as Zambians, something that we have control over. I am no economist, but if you analyse past Zambian inflation structure, food inflation contributes 60% of the total inflation. And since we are nshima-loving, mealie meal prices have the largest weight in this inflation figure. In simplistic terms, all we need to do is grow maize throughout the year, not just in December. Export the surplus mealie meal (not maize) to DRC & Zimbabwe. So when Governor Fundanga talks of a positive BoP, I will have a big fat grin on my face because I know the money is going into our pockets!

  39. Indeed very informative, with the “phillip curve”,”Stagflation” and i’ll also bring in the new theories, such as rational expectations and the NAIRU (non-accelerating inflation rate of unemployment) which arose to explain how stagflation could occur. The latter theory, also known as the “natural rate of unemployment”, distinguished between the “short-term” Phillips curve and the “long-term” one. The short-term Phillips Curve looked like a normal Phillips Curve, but shifted in the long run as expectations changed.In the long run, only a single rate of unemployment (the NAIRU or “natural” rate) was consistent with a stable inflation rate.

  40. If my uncle Obby in the vilage, who by the way spends most of his time drinking kachasu and telling the ‘villagers’ how educated he is – he’s a grade 12 drop out – but works dilligently on his piece of land to feed his family, knew he can sell his maize to millers throughout the year,not only will he stop drinking kachasu all the time, but he will employ all his relatives [reduce unemployment] to grow maize, pay them a salary [economic empowerment], flood the market, which will reduce the mealie meal prices [reduce Chulu’s inflation], and the miller with more financial muscle will take the surplus to Uncle Bob in Zim [increase Fundanga’s trade surplus].

  41. But of couse Mwanawasa will have to help my uncle Obby, since Uncle Obby is trying to sort out Mwanawasa’s headache of having 80% of the youth unemployed. He needs to talk to his friend Mahtani to give uncle Obby a loan to mechanise his farm and buy irrigation equipment. He will have to tell Sisala to make sure there is no load shedding on Ucle Obby’s farm. He also needs to tell Simbao to build a road up to uncle Obby’s village, so that Cottan can drive his truck there and pick up all of Uncle Obby’s produce for onward delivery to the market.That, bloggers, is how Uncle Obby will sort out the national problems. …Uncle Obby for President!

  42. No. 43: EHK its great that u are impressed by how well people have understood the above article and how dynamic they have been in offering solutions to curb the various economic difficulties however dont assume u can turn this blog into some economics rant and rave session, u seem to be well educated but can u please apply that knowledge to the problem at hand, its no good having a vehicle if u cant drive. This is not a keynesian seminar or a marxist lecture apply your tuma economics knowledge as to why inflation has soared into double digits and what can be done to reduce it.

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