20.05.2026
Zambia’s economy continued to recover in 2025, supported by stronger mining activity, record maize production, easing electricity shortages and improved confidence after progress on debt restructuring. Growth is expected to remain solid in 2026–2027, driven by copper production, agriculture, services and a gradual recovery in power generation. Inflation is projected to decline toward the Bank of Zambia’s 6%–8% target range, helped by a stronger kwacha, improved food supply and tighter monetary policy. Fiscal and debt pressures remain significant, but the debt ratio is expected to fall as restructuring gains, growth and fiscal consolidation take effect. The external position should improve, supported by copper exports and stronger mining-sector foreign-exchange inflows.
| Indicators | 2025 | 2026 | 2027 |
|---|---|---|---|
| GDP growth (%, yoy) | 5.8 | 6.1 | 5.8 |
| Inflation (%, yoy) | 9.0 | 8.0 | 7.0 |
| Employment rate (% of working-age population, 15+) | 57.2 | 57.3 | 57.3 |
| Fiscal balance (% of GDP) | -4.9 | -4.4 | -3.1 |
| Gross public debt (% of GDP) | 83.5 | 78.3 | 73.2 |
| Current account balance (% of GDP) | 0.9 | 1.9 | 2.1 |
Growth strengthens on mining and agriculture
Zambia’s real GDP growth is estimated at 5.8% in 2025, rebounding from the drought-affected slowdown in 2024. Growth was supported by stronger mining output, especially copper, record maize production, improved rainfall and a gradual recovery in electricity generation. Services also contributed to activity as confidence improved after progress on external debt restructuring.
Growth is projected to remain strong, at 6.1% in 2026 and 5.8% in 2027. Copper production and investment in mining will remain the main drivers, supported by favourable commodity prices and improved foreign-exchange supply from the mining sector. Agriculture should also support growth if weather conditions remain favourable. However, electricity constraints, policy uncertainty and delays in mining-sector investment remain important risks.
Inflation declines toward the target range
Inflation remained elevated in 2025, averaging around 9.0%, but the trend improved sharply toward the end of the year and early 2026. A stronger kwacha, better agricultural conditions and improved food supply helped reduce price pressures, allowing the Bank of Zambia to cut its policy rate in early 2026.
Inflation is projected to fall to 8.0% in 2026 and 7.0% in 2027, moving back toward the 6%–8% target range. The disinflation path remains vulnerable to food prices, fuel costs, exchange-rate movements and renewed electricity shortages. Maintaining a cautious monetary stance will be important until inflation expectations are firmly anchored.
Fiscal consolidation continues, but pressures remain
The fiscal deficit is estimated at 4.9% of GDP in 2025 and is projected to narrow to 4.4% in 2026 and 3.1% in 2027. Revenue performance should improve with stronger mining activity, while debt-service relief and ongoing fiscal reforms support consolidation. However, spending pressures remain significant, especially from wages, agricultural support, energy-sector needs and election-related expenditure.
Public debt remains high but is expected to decline steadily, from 83.5% of GDP in 2025 to 73.2% in 2027. Debt restructuring has improved the outlook, but Zambia still faces high financing needs and risks from domestic debt, arrears and contingent liabilities. Sustained fiscal discipline and completion of remaining restructuring steps will be essential.
External position improves with copper exports
The current account is expected to move into surplus, rising from 0.9% of GDP in 2025 to 1.9% in 2026 and 2.1% in 2027. Stronger copper exports, higher mining-sector foreign-exchange inflows and improved production should support the external balance.
The external outlook remains highly dependent on copper prices, mining output, electricity availability and global demand, especially from China. Higher fuel import costs, weaker copper prices or disruption to mining production would quickly weaken the balance of payments. Rebuilding reserves and maintaining exchange-rate flexibility remain important for external stability.
Overall outlook
Zambia’s outlook has improved after the drought shock and the long debt restructuring process, but vulnerabilities remain high. Growth should stay solid in 2026–2027, supported by mining, agriculture and services, while inflation is expected to return gradually to the target range. The main policy challenge is to preserve fiscal discipline while supporting growth, restoring debt sustainability and addressing electricity-sector constraints. Medium-term performance will depend on mining investment, agricultural resilience, reliable power supply, debt management and continued reforms under a credible macroeconomic framework.
Sources:
World Bank, Zambia Macro Poverty Outlook, April 2026.
World Bank, Zambia Economic Update: Leveraging Energy Transition Minerals for Economic Transformation, July 2025.
International Monetary Fund, Zambia: Sixth Review Under the Extended Credit Facility, January 2026.
International Monetary Fund, World Economic Outlook, April 2026.
Bank of Zambia, Monetary Policy Report, February 2026.
African Development Bank, Zambia Economic Outlook, 2026.
