‘Inflation drop good news’

Former Commerce minister Felix Mutati and Development Bank of Zambia chief executive officer Jacob Lushinga said in separate interviews yesterday that the drop in inflation is a clear indication that production has increased in the country.
“The drop in inflation when it is expected to be increasing at the end of the year is a plus and will help boost economic development. It should be maintained or reduced further,” Mr Mutati said.
Mr Mutati said the development is good given that inflation usually increases towards the festive period.
“The decrease in inflation from 7 percent to 6.9 percent will trickle down to entrepreneurs and will make their businesses even more viable,” Mr Lushinga said.
Mr Mutati, however, said that the government should keep this development checked and check its borrowing rate since no country can avoid borrowing anyway.
Mr Mutati said that the price of maize should be checked as the year is ending because it contributes to inflation.
Mr Lushinga said that if the government maintains the 6.9 percent then several entrepreneurs will benefit.
He said that a decrease in inflation means that several entrepreneurs will now afford to get assistance from the banks.
Mr Lushinga said the drop in inflation means that the economic outlook is bright.
He said that in the past 12 months the economy has performed very well.
Mr Lushinga, however, said that a decrease in the exchange rate negatively affects bank operations.
He said that instead of making profits, his bank, which gives loans in United States of America dollars, records losses.
On Thursday last week, the Central Statistical Office (CSO) announced a decrease in inflation from 7 percent to 6.9 percent, saying this was due to a reduction in the annual food inflation.
CSO director John Kalumbi said the annual food inflation rate decreased by a percentage point to 5.9 percent in October from 6.5 percent recorded in September.