• It is expected that the price movement will also be reflected in this month’s inflation rate.
• June inflation rate is projected to either reduce or remain the same.
• Tax waiver imposed on importation of fuel is helping to keep prices of petroleum products within affordable range.
An Economist says the K33 reduction in the May 2022 Basic Needs and Nutrition Basket is a positive development as it entails a saving by consumers compared to the month of April.
Speaking to Money FM News, Emmanuel Zulu said it is expected that the price movement will also be reflected in this month’s inflation rate as it is projected to either reduce or remain the same.
Mr. Zulu stated that his projection is based on the fact that the country did not see a major adjustment on the monthly price review of fuel by ERB.
“I wish to therefore agree that this is a positive development as it will entail a saving by the consumers as compared to last month. I agree on the stance of not reintroducing subsidies as this is not within the capacity of our budget due to the current debt burden which is still yet to be restructured,” Mr. Zulu said.
He explained that in as much as the country is currently losing income from the tax waiver imposed on importation of fuel, the waiver is helping to keep prices of petroleum products within affordable range, thereby keeping the Basic Needs and Nutrition Basket lower.
Mr. Zulu appealed to ERB not to effect upward adjustment of electricity tariffs or remove the tax waiver currently in effect because this will enable the country to continue on the path towards the single digit inflation rate and keep the cost of living within acceptable range.
He further called on government to increase opportunities for economic growth through enhancement of production and value addition, and take advantage of the increasing markets being opened in neighboring countries.
“The call to release the CDF is therefore timely as we are half way to closing the year and projects need to start running in order to also improve liquidity levels in the economy,” he stated.
The cost of living for a family of five in Lusaka reduced to K9, 293.04 in May 2022, compared to the April 2022 basket which stood at K9, 326.41.
JCTR Social and Economic Development Programme Officer, Natasha Phiri has attributed the reduction to the movement of food items whose prices move according to the seasonality of the items and the lifting of fish ban which has seen Kapenta being supplied in large quantities on the market.