Analysis by Region - Africa
Zambia's short-term prospects are shrouded in uncertainty. Contradicting meteorological forecasts muddy the outlook for hydropower generation and agricultural output. We prefer to err on the side of caution and place a higher stake on those meteorological forecasts that warn of a weak and short-lived La Niña. If these warnings materialise, Zambia could face prolonged, expensive power imports, a weaker recovery in food supply, and elevated inflation. Conversely, a better-than-expected rainy season holds the potential of a rapid recovery in hydropower generation, a sharp reduction in the costs of critical imports, and lower imported inflation.
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