Zambia's economic growth decelerated sharply in the final quarter of last year, with annual output expanding at nearly half the rate the government had projected. The slowdown was exacerbated by record power outages that disrupted industrial production and business operations across the country. These outages, the worst in recent memory, crippled manufacturing and mining sectors that form the backbone of Zambia's export economy.

Inflation, however, showed a positive trend, slowing to its lowest level in eight years. This decline in inflation suggests that monetary policy measures may be taking effect, even as the broader economy struggles. The contrast between slowing growth and easing inflation presents a complex economic picture for policymakers, who must balance the need for stimulus with the benefits of price stability.

The power crisis has exposed vulnerabilities in Zambia's infrastructure, particularly its dependence on hydroelectric power. With drought conditions reducing water levels in key dams, the country has faced severe electricity shortages that have forced businesses to operate at reduced capacity or rely on expensive diesel generators. This has increased operational costs and reduced competitiveness in international markets.