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Zambia's Economy Slows Amid Drought and Power Cuts
26 Mar
Summary
- Zambia's economic growth rate significantly slowed in late 2025.
- Annual GDP growth for 2025 was 3.8%, missing government targets.
- Inflation decelerated to its lowest point in eight years.
Zambia's economic growth experienced a marked slowdown in the last quarter of 2025. Gross domestic product expanded by 1.6% in the three months through December, a sharp decrease from the 8.3% recorded in the previous quarter. The overall annual growth for 2025 stood at 3.8%, falling short of the 6.6% target set by the Finance Minister and the 4.5% anticipated by the International Monetary Fund.
This economic deceleration, particularly in the information and communications, and wholesale and retail trade sectors, is strongly suspected to be influenced by the severe drought in 2024 and extensive power outages. These issues contributed to the slowest economic growth seen this decade in 2024.
Despite the economic slowdown, Zambia has seen a significant reduction in inflation. Consumer prices rose annually by 7.1% in March, the lowest rate recorded since March 2018. This cooling inflation is largely a reflection of data collected before the recent conflict in Iran impacted global energy and fertilizer markets, with further price increases anticipated.
