By Mubanga Mubanga
Bank of Zambia (BoZ) Governor Denny Kalyalya says the cost of living will come down in Zambia if the country grows the economy.
And the Bank of Zambia has maintained the Monetary Policy Rate (MPR) at 14.5 percent.
Speaking at the MPR press briefing yesterday, Dr Kalyalya said the only way the country would conquer the high cost of living was through economic growth.
“The cost of living won’t come down until we do these things, which is, grow the economy, have more employment generated, that is what will bring about that lower cost of living,” Dr Kalyalya said. “But it is like we want to flip, unless now you are going to get subsidies, where is the money for subsidies going to come from? We have (to) raise money for subsidies.”
He said the government did not have money of its own saying it got money from citizens and companies.
“So, when you saying do more of this, it means that less of something else,” he said.
Dr Kalyalya said the MPR was appropriate because of the recent decline in inflation
“At its May 21-22 meeting, the Monetary Policy Committee decided to maintain the Monetary Policy Rate at 14.5 percent. Maintaining the current stance is deemed appropriate considering the recent decline in inflation to 16.5 percent in April from 16.8 percent in February, the balance of risks tilted to the downside and the stability of the financial system,” Kalyalya said.
Meanwhile, Kalyalya said inflation was likely to reduce in the next eight quarters, stressing that this was because of the projected bumper maize harvest of 3.6 million metric tonnes for the 2024/2025 farming season, and the anticipated reduction in fuel prices.
“The forecast over the next eight quarters shows that inflation will decline faster toward the 6-8 percent target band than projected in February. Inflation is now anticipated to average 13.8 percent in 2025 compared to 14.6 percent in 2026,” said Dr Kalyalya.
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