Zambia annual inflation is likely to slow down following a bumper maize crop, while improved copper prices will help stabilise the exchange rate, Reuters quoted Bank of Zambia governor Caleb Fundanga as saying today. Fundanga said inflationary pressures should ease due to anticipated lower food prices after the start of the marketing season for white maize on June 1. "We still have some good six months to go before the end of the year and if we work hard, I am sure we can achieve the target of 10 percent annual inflation for this year and also achieve all our macroeconomic targets," Fundanga told journalists. The southern African country has targeted a lower inflation rate of 10 percent inflation by December this year and annual GDP growth of 5.8 percent. Inflation however quickened to 14.7 percent year-on-year in May from 14.3 percent the previous month due to higher food prices. "We are happy that the grain marketing season has just started, so hopefully going forward, some of the (inflationary) pressures that arise from food inflation will come down," Fundanga said. "The exchange rate has started to stabilize a little bit and the kwacha has started to strengthen, this also should have some beneficial impact on the prices of imported goods," he added. Fundanga said the Zambia economy was showing signs of rebounding after a slowdown caused by the collapse in copper prices last year. Copper is Zambia's biggest employer and accounts for about 63 percent of the country's total foreign exchange earnings. "The picking up of the price of copper on the international market is a good thing for us as it is also indication that the global economy is picking up," Fundanga said.
