Overall annual inflation climbed to 22.8% in March from 22.2% in February, driven by food inflation, which jumped to 27.8%.
The higher prices result from a loss of confidence in the kwacha, says Shani Smit, an economist at NKC African Economics in South Africa. Since October, food-price inflation has soared by more than 13%, she notes. “One of the main drivers behind the rise in food price inflation was kwacha weakness.”
Headline inflation is likely to peak in April and then gradually slow, Smit says. Reasons for optimism are the harvest season starting in April and the government’s decision not to charge value-added tax on fuel imports, she says.