Economy
Zambia’s economy grew 7.7% year on year in the first quarter of 2026, up from 4.5% in the first quarter of 2025, as copper production rebounded and inflation fell to 6.8% in April 2026, within the Bank of Zambia’s 6-8% target band.
Real GDP growth slowed to 3.8% for full-year 2024 and is preliminarily estimated at a similar 3.8% for full-year 2025, before the sharp first-quarter 2026 rebound[1][2][3]. The Bank of Zambia had projected a more modest 5.8% for the first quarter, so the actual 7.7% outturn reported by the Zambia Statistics Agency in July 2026 ran well ahead of the central bank’s own estimate[1][3]. Mining, and copper specifically, remains the swing factor behind Zambia’s growth cycle, while inflation has fallen fast enough in 2026 to give the central bank room to start cutting interest rates.
GDP Growth: 2025 Into 2026
The Zambia Statistics Agency’s final annual GDP release puts real GDP growth at 3.8% for both 2024 and 2025, with nominal GDP rising from ZMW 662,093.7 million in 2024 to ZMW 725,641.4 million in 2025[2]. The 2025 figure remains preliminary, but the Bank of Zambia, Ministry of Finance and National Planning (MoFNP), International Monetary Fund (IMF) and FocusEconomics all converge on that same 3.8% preliminary estimate[3].
The path within that average was uneven. Real GDP grew just 1.6% in the fourth quarter of 2025, well short of the Bank of Zambia’s own February 2026 projection of 5.4%, largely on a weak agricultural season[3]. The Zambia Statistics Agency’s Q1 2026 quarterly release then recorded a sharp rebound to 7.7% year on year growth, up from 4.5% in the first quarter of 2025 and ahead of the Bank of Zambia’s own 5.8% estimate for the quarter[1][3], driven by a 3.5% rise in copper output after a 5.5% contraction in the fourth quarter of 2025[3].
Looking ahead, forecasters have trimmed their 2026 and 2027 growth projections. As of April 2026, the Bank of Zambia projects 4.8% growth for 2026, MoFNP projects 4.5%, the IMF’s World Economic Outlook projects 4.3%, and FocusEconomics projects 5.1%, all down from forecasts above 6.0% earlier in the cycle, on revised expectations for the information and communication technology, mining and quarrying, financial and insurance, construction, accommodation and food services, public administration, and wholesale and retail trade sectors[3]. Separately, the World Bank’s July 2025 Zambia Economic Update projected 5.8% growth for 2025 and an average of 6.5% for 2026-27, attributing part of the 2025 expansion to base effects as the economy recovered from the 2024 drought[7].
Inflation and Monetary Policy
Inflation fell sharply through the first four months of 2026. It averaged 11.3% in the fourth quarter of 2025 and 8.0% in the first quarter of 2026, before easing to 7.1% in March and 6.8% in April, back within the Bank of Zambia’s 6-8% target band[3]. December 2025 inflation had stood at 11.2%[3]. The disinflation was driven mainly by base effects from maize grain and related products and by the sharp appreciation of the Kwacha[3].
The Bank of Zambia now projects average inflation of 6.8% for full-year 2026 and 6.1% for 2027, both revised down from its February 2026 forecasts of 6.9% and 6.7% respectively[3]. At its May 11 to 12, 2026 meeting, the Monetary Policy Committee cut the Monetary Policy Rate by 25 basis points to 13.25%, citing the favourable maize harvest outlook and the relative stability of the Kwacha, while flagging the Middle East conflict as an upside risk to prices that warranted a cautious pace of easing[3].
The Kwacha and the External Sector
The Kwacha appreciated sharply against the US dollar through late 2025 and into 2026, gaining 4.1% on average in the fourth quarter of 2025 and a further 14.8% in the first quarter of 2026, with an additional 0.8% gain in April[3]. The average exchange rate moved from ZMW 22.80 per USD in the fourth quarter of 2025 to ZMW 19.43 per USD in the first quarter of 2026, on strong foreign currency inflows from mining and foreign financial institutions[3].
Zambia’s current account deficit narrowed to USD 1.6 billion, or 6.1% of GDP, from USD 1.9 billion, or 6.9% of GDP, the previous year, as export growth outpaced import growth[4]. Imports rose 10% to USD 10.1 billion, while copper exports grew 13.2% to USD 7.5 billion and gold exports more than doubled to USD 261.6 million from USD 127.5 million[4]. A capital account surplus of USD 1.3 billion, boosted by more than USD 1.2 billion in one-off debt forgiveness, partly offset a financial account deficit of USD 659.6 million tied to a Eurobond repayment[4]. The full breakdown of exports, imports and trade agreements is covered on the dedicated Trade page[4].
Fiscal Position
Zambia’s fiscal deficit is projected to widen to 3.5% of GDP in 2026, from 2.1% of GDP previously, mainly reflecting the fiscal impact of the Middle East conflict on import costs and new financing needs, even as the government continues its medium-term fiscal consolidation path[3].
Financial Sector Stability
The banking sector entered 2026 well capitalised, with bank-wide total regulatory capital at 23.6% of risk-weighted assets, comfortably above the regulatory minimum[5]. Asset quality has continued to improve: the non-performing loans ratio slid a further 0.8 percentage points to a multi-decade low of 2.7%[5]. The Bank of Zambia notes that financial market stress ticked up slightly as the rapid appreciation of the Kwacha created valuation effects for some market participants, even as the core banking system remained sound[5].
Foreign Direct Investment
Net FDI liability inflows to Zambia’s private sector surged to USD 2,359.4 million in 2024, up from USD 641.1 million in 2023, the highest level recorded since consistent surveys began in 2010, driven by growth across reinvested earnings, intercompany lending and equity capital[4]. FDI accounted for 87.7% of Zambia’s total private sector foreign liabilities in 2024, up from 77.0% the previous year, with the stock of those liabilities rising 9.9% to USD 19.8 billion[4]. In the first half of 2025, the stock of private sector foreign liabilities rose a further 7.8% to USD 17.9 billion compared with the same period in 2024, driven by reinvested earnings and intercompany loans concentrated in mining and deposit-taking institutions[4]. Canada, the British Virgin Islands, China, the United Kingdom and the United Arab Emirates were the leading source countries for Zambia’s FDI liability stock in 2024, together accounting for 64.2% of the total, with investment concentrated in mining[4].
IMF and World Bank Assessments
The IMF’s fifth review under Zambia’s Extended Credit Facility arrangement, part of the 2025 Article IV Consultation, recorded 4.5% year on year GDP growth in the first quarter of 2025 on strong agriculture and mining performance, with mining output up 17.5% year on year during January to May 2025 and inflation easing to 14.1% year on year in June 2025 as the harvest eased food prices[8]. On July 17, 2025, the government adopted an amended 2025 budget carrying 0.5% of GDP in revenue measures and spending reprioritization, to offset higher interest payments on restructured debt, sustained social cash transfer support, stop-gap health spending after the suspension of USAID funding, and election-related expenses[8]. The World Bank’s 2025 Country Policy and Institutional Assessment, released alongside the review, raised Zambia’s score from 3.24 to 3.28 on improved economic management, though the resulting debt-carrying-capacity composite indicator rose only marginally to 2.59, still below the 2.69 threshold for a medium debt-carrying-capacity classification[8].
The World Bank’s July 2025 Zambia Economic Update set out four priorities to sustain growth: completing the transition to a fully e-voucher-based agricultural input support system alongside greater private sector-led agricultural financing to lift productivity; increasing competition in the energy sector to raise productivity; strengthening revenue administration to close tax collection gaps; and maintaining a tight monetary policy stance to anchor inflation expectations[7]. The report’s special topic covered energy transition minerals, the metals such as copper and cobalt used in batteries and renewable energy technology, identifying three priorities for Zambia: scaling up production of these minerals, maximising their fiscal potential through stronger revenue management, and adding value domestically through further development of the copper value chain[7].
Investment Opportunities
The Zambia Development Agency registered investment commitments totalling USD 7.0 billion in the period covered by the 2025 investor survey, up from USD 6.1 billion in the equivalent period the year before[4]. Separately, Zambia secured 14 new project commitments totalling USD 3.4 billion spanning energy, agriculture, manufacturing, mining, construction, and water and sanitation[4]. Mining continues to draw the largest share of committed and realised foreign investment, consistent with its dominant share of both FDI stock and export earnings, while investor perception survey respondents also point to opportunities in the sectors feeding into the Kwacha’s current stability, including agriculture ahead of the 2025/26 crop marketing season[3][4]. The informal sector accounts for an estimated 40% of Zambia’s GDP and, by International Labour Organization estimates, as much as 84% of employment[6], while the US Department of State notes that although the Zambian government reported 3.9% GDP growth for 2024, some observers have questioned the accuracy of the government’s underlying GDP calculation, a reminder that investors should weigh headline growth figures alongside the underlying sectoral and survey data rather than in isolation[6].
Last Update: August 2026
References
- Zambia Statistics Agency, Quarterly GDP, Q1 2026
- Zambia Statistics Agency, Final Annual GDP release (2024 data)
- Bank of Zambia, Monetary Policy Report, May 2026
- Bank of Zambia, Zambia Statistics Agency and Zambia Development Agency (Balance of Payments Statistical Committee), Foreign Private Investment and Investor Perceptions in Zambia, 2025
- Bank of Zambia, Financial Stability Report, April 2026
- US Department of State, 2025 Zambia Investment Climate Statement
- World Bank, Zambia Economic Update: Leveraging Energy Transition Minerals for Economic Transformation, July 2025
- International Monetary Fund, Zambia: Staff Report for the 2025 Article IV Consultation, Fifth Review Under the Extended Credit Facility Arrangement, and Financing Assurances Review, Supplementary Information, July 2025
