The International Monetary Fund (IMF) has released its October 2025 issue of the Regional Economic Outlook: Sub-Saharan Africa, projecting a Gross Domestic Product (GDP) growth of 5.8% and 6.4% for Zambia in 2025 and 2026.
Sub-Saharan Growth and Inflation in 2025 and 2026
Sub-Saharan Africa’s economic growth is projected to remain steady at 4.1% in 2025 with a modest pickup in 2026, supported by macroeconomic stabilization and reform efforts in key economies.
Resource-intensive and several conflict-affected countries continue to face headwinds.
Median inflation has eased from over 6% at the end of 2023 to around 4%, driven by lower global food and energy prices alongside tight monetary policies.
Nevertheless, inflation is projected to remain in double digits through at least the end of 2025 in about one-fifth of the region, including Angola, Ethiopia, Ghana, and Nigeria.
Zambia Economic Growth and Inflation in 2025 and 2026
The IMF projects Zambia’s economy to maintain strong growth momentum over the next two years.
Real GDP growth is expected to reach 5.8% in 2025 and 6.4% in 2026, reflecting continued recovery supported by fiscal consolidation and improved sectoral performance. Inflation is projected to ease from 14.2% in 2025 to 9.2% in 2026, indicating gradual stabilization under tighter monetary policy and improved domestic supply conditions.
The overall fiscal balance, including grants, is projected to turn to a surplus of 1.3% of GDP in 2025 and 2.7% in 2026, reflecting improved revenue collection and expenditure control.
Government debt is expected to remain stable at around 30% of GDP, while the external current account, including grants, is projected to narrow slightly from 3.1% of GDP in 2025 to 2.8% in 2026.
Projections for external and government debt beyond 2024 are omitted due to Zambia’s ongoing debt restructuring process.
Zambia’s Tax Reforms and Investment Policy Lessons
The IMF report references Zambia’s experience with tax reform, noting that the proposed shift from a Value-Added Tax (VAT) to a non-refundable sales tax in 2018-19 was ultimately scrapped following delays, resistance from the private sector, and concerns over competitiveness and readiness.
The IMF cites this as an example of the importance of proper transition planning and impact assessment when implementing major tax policy changes.
