Economic growth in Zambia is expected to accelerate to 6.1 percent in 2026, driven by rising copper production and lower inflation, according to a report by Fitch Solutions.
The forecast marks a notable improvement from an estimated 4.4 percent growth in 2025 and significantly exceeds the country’s average annual growth rate of about 3.4 percent recorded between 2015 and 2024.
According to the report, two key factors will support the stronger expansion: easing inflation that should revive consumer spending and a recovery in electricity supply following improved water levels at the Kariba Dam.
Inflation easing supports consumer demand
Price pressures in Zambia have eased considerably in recent months. Consumer inflation dropped to 7.5% year-on-year in February 2026, its lowest level since June 2018 and the first time since April 2019 that inflation has fallen within the central bank’s target range of 6 percent to 8 percent.
The decline places inflation squarely within the policy band set by the Bank of Zambia and could pave the way for further monetary easing.
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Fitch Solutions expects the central bank to gradually lower borrowing costs, forecasting the policy rate to fall to 11.75 percent by the end of 2026 from its current level of 13.50 percent.
Lower interest rates would help stimulate domestic demand by reducing the cost of credit for households and businesses, providing additional support for economic activity.
Energy recovery to ease power shortages
Electricity generation is also expected to improve as water levels recover at Kariba Dam, one of southern Africa’s largest hydroelectric facilities.
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The dam experienced historically low water levels in 2024 following a severe drought linked to the El Niño weather pattern. The drought significantly reduced hydroelectric output and forced authorities to impose widespread load-shedding, which disrupted industrial production and economic activity.
With water inflows improving, electricity generation is expected to rebound, helping reduce power outages and enabling mining operations and other industries to expand output.
Copper sector to drive exports and investment
Zambia’s mining sector is set to remain the main engine of growth. The country is one of Africa’s largest producers of copper, and the metal accounts for the bulk of export earnings.
Fitch Solutions forecasts copper production to rise by about 10 percent in 2026, supported by expanding operations and stronger global demand.
Global copper prices are expected to average around US$11,900 per metric ton this year, representing a 19.6 percent increase compared with 2025.
Higher production and stronger prices would boost export revenues and foreign-exchange earnings, while encouraging additional investment by major international mining firms seeking to capitalize on Zambia’s large copper reserves.
Beyond mining, the report also notes growing investor interest in the country’s energy sector. The government has been liberalising parts of the electricity market and promoting renewable energy investment, particularly in solar power, given Zambia’s strong solar generation potential.
Risks remain
Despite the positive outlook, Fitch Solutions warned that several external and climate-related risks could weigh on Zambia’s growth prospects.
One potential risk stems from the ongoing tensions involving the United States, Israel and Iran, which could disrupt global energy markets.
As a net importer of energy, Zambia is vulnerable to rising fuel prices or supply disruptions. Any instability could also affect the availability of key inputs used in copper production, such as sulphur.
Climate conditions pose another risk. Below-average rainfall would affect agricultural output and could again lower water levels at Kariba Dam, undermining the expected recovery in hydroelectric generation.
Even so, if copper output rises as expected and inflation continues to moderate, Zambia could experience one of its strongest periods of economic growth in more than a decade.
