Zambia has demonstrated macroeconomic resilience with solid GDP growth, falling inflation, and a strengthening currency, alongside robust fiscal discipline. Despite these gains, the country faces significant downside risks and remains at high risk of debt distress. The latest Zambia Economic Update (ZEU) emphasizes that sustaining this momentum requires economic diversification and private-sector growth, with a strong, sustainable power sector being central to achieving these development goals. The ZEU outlines a pathway to transform the electricity sector from a constraint into a catalyst for growth, jobs, and development. Key recommendations include restoring the sector's financial health through cost-reflective tariffs, settling government arrears to utilities, and reducing system losses. Implementing these strategies is expected to lead to stronger GDP growth, higher incomes, a lower debt-to-GDP ratio, and significant job creation.