05/05/2026
SECRETARY TO THE TREASURY EXPLAINS SLOW PRICE ADJUSTMENTS DESPITE FALLING INFLATION
By Nelson Zulu
Secretary to the Treasury Felix Nkulukusa says the slow decline in commodity prices despite easing inflation does not signal a mismatch in the economy.
In an interview with Phoenix News, Mr. Nkulukusa explained that although inflation has been steadily falling since January, reductions in the prices of goods and services are not immediate due to prevailing economic dynamics.
He has attributed the trend to the ratchet effect, a situation where prices rise quickly during periods of high inflation but adjust more slowly when inflation begins to decline.
Mr. Nkulukusa notes that producers and traders often maintain prices in the short term as they continue to absorb earlier cost increases, including wages and production expenses, which do not fall at the same rate as inflation.
He added that over time, as purchasing power improves and market conditions stabilise, increased sales volumes could contribute to gradual reductions in prices across various commodities.
Zambia’s inflation rate has been on a downward trend since December 2025, declining from 11.2 percent to 9.4 percent in January 2026, before dropping further to 7.5 percent in February, 7.1 percent in March, and 6.8 percent in April.
PHOENIX NEWS
