Malawi inflation climbs to 21.3 % and rising

Malawi’s year-on-year headline inflation rate for June 2015 has risen by 1.8 percentage points to 21.3 percent from 19.5 percent in May 2015, signalling that the poor southern African country is struggling to keep its economy functioning normally without aid.

This is the direction: Finance Minister Goodall Gondwe show the way to Vice President Saulos Chilima

This is the direction: Finance Minister Goodall Gondwe show the way to Vice President Saulos Chilima

Kwacha weakening

Kwacha weakening

Inflation is the rate of increase in prices over a given period of time. It is typically a broad measure, such as the overall increase in prices or the increase in the cost of living. But it can also be more narrowly calculated—for example, for certain goods, such as food, or for services, such as school fees.

The Reserve Bank of Malawi (RBM) data shows by June inflation rate in the country has averaged 14.52 percent from 2001.

Inflation reached an all-time high of 37.90 percent in February 2013 and a record low of 6.30 percent in December 2010.

The unemployment rate continues to rise and the local currency, Kwacha is still weakening against major international currencies like th US Dollar.

The weakening of Kwacha currency is in sharp contrast to the high levels of foreign currency the economy is sitting on, cumulatively at $1 billion ($500 billion) as at July 13 2015. This is a combination of gross official reserves, held in the custody of the Reserve Bank of Malawi (RBM) to prop up the kwacha, estimated at $724.29 million, or 3.47 months of import cover, and private sector reserves in commercial banks at $292.4 million, or 1.4 months of import cover.

Recently, Minister of Finance and Economic Planning Development Goodall Gondwe conceded that the country is going through turbulent times and that the economy is in “bad” shape

Gondwe who seeks to achieve single-digit inflation rate in two to three years time set the inflation target for this fiscal year at 15 percent and an inferred December target of 12 percent.

.But analysts expect the inflation rate to keep rising as many Malawi face severe food shortages.

In its June 2015 monthly economic report, the Blantyre-based investment advisory firm Nico Asset Managers Limited, said: “Inflation is expected to remain elevated, as a result of the rising food prices from lower than expected harvest and recovering global oil prices.”

Former economic planning minister Ralph Jooma has said radical changes are needed to revive Malawi’s economy, which is in bad shape and requires a fresh approach.

Jooma said inflation “will not be as low” and that the exchange rate “will not be as stable.”

He said: “Interest rates will remain high and industry capacity utilization will subdue and therefore hamper economic growth because the economy will not be able to produce the projected goods and services. This is the reality.”

An economic observer told Nyasa Times that although DPP had “rigged the May20, 2014 election, it will not be able to rig the economy”.


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16 thoughts on “Malawi inflation climbs to 21.3 % and rising”

  1. Khamani!! says:

    Why are you lying that Malawi is not receiving donor aid. The aid is just not being channelled though the kleptomaniac of a government . Without aid Malawi would be on the verge of collapse. Watch now , bad tobacco sales, poor harvest , MRA not meeting collection targets and the fiscal year has just began. Watch now …

  2. Mayo says:

    Nankhumwa looking at VP with tongue sticking out like a snake.

  3. Clueless leadership says:

    We are now heading to:
    Dizilo Petulo Palibe.
    Forex Palibe.
    Mankhwala Palibe.
    Malipiro ama Civil Servants Palibe.
    Chitetezo ndi icho palibe kale.

    Makosana Mbendera anatilakwira

  4. Edmund says:

    i think this article is just an alarmist. Yes kwacha has lost value yes inflation is on the rise but it has not reached the stinging point yet. Its good that these issues are showing now. The only bad thing is if the government does nothing about it. We do note though that government has done its part in controlling expenditure which is good to spend only what you have. This will help in curbing inflation. So well done Goodall and Peter. The other good thing is government is is now selling Malawi for investment (to attract FDI) this is best thing Malawi has done maybe since I was born ! Ok results/fruits out of this will not arrive over night but government must tightly follow up on all those possible leads coming out of the recent invest forums. The president must hold accountable any minister/ps who will let any opportunity fall through the fingers – this is where i sometimes I do not like our leaders they tend to be weak in holding failures accountable (either due to some past connections). Please be tough on weak performers.

    Malawi must learn and actually live on its resources. I get sick when I hear over emphasis on begging. I have never seen a beggar graduating into a successful being (become millionaire!). If we want to remain poor let us continue begging. Malawians let all start working hard. Let us encourage all those in the village or those who sit idle in streets boasting that ‘ndangokhala-khala ndilibe chochita or even waste time writing discouraging stuff here on the web to start working hard and contribute to the national GDP cake. Most Malawians are lazy thus why the economy is doing badly now. I encourage our politicians to step up more words that would encourage harding work spirit for all people women and the young.

  5. The problem here is African governments waste too much time in trying to bring people to the economy instead of taking the economy to the people,China is doing it perfectly, because the more chances you give to people to open up their proper businesses, the more taxes government will collect which equals to more development for country in general. Its no rocket science like the government would make us believe.

  6. Richard. Banda says:

    this should not suplise us coz we have begun this year with calamities .Who ever would be in power could not change anything,thanks the tecnocratic DPP Govt.other wise the sinarial would be the worst.

  7. Ya nyengo zovuta zimabwera ndikupita sizikhala forever ayi. This as well will pass.

  8. agnes wanzeru says:

    Bomali likuyendetsedwa ndi nkhalamba zokhazokha. Goodal, Peter, Chuka ishiii !!. They are using stone age economic principles. Apaseni anyamata ma .com akuthandizeni.

  9. Sapitwa says:

    Inflation rise in repeat if it was 37.9% in 2013 at the time when donor funds were pouring in.Not bad in the absence of donor funding. This gives government serious thinking to create an environment to
    increase domestic production of the essential commodities: maize,sugar,cooking oil,rice,soap and other basic commodities.
    Farmers should however be given incentives to produce portions of their produce on export.

  10. Lets be patient and pray for our mother malawi.We’ll get used and things will.Its time now to learn to stand on our feet.

  11. Samuel says:

    No big deal. Peter and Goodall don’t panic. You guys have already shown your good work. Up to date no funding from Asamunda but we are in this situation. Late Bingu (may his soul rest in peace) advised us to start implementing Zero deficit which for the first time will not be easy for us but as we get along we’ll be there and manage our economy without relying donor funding. Malawians let’s give Peter and Goodall chance to try their best and see how they will fair. Don’t rush into blaming them. For the first time these guys have managed a zero aid budget and we are comfortable like this. Do you think this is easy?? Absolutely no!! Let’s wait and see. Peter Goodall keep it up! I love you guys.

  12. Wamandassi says:

    If the the inflation is that high without donor. That’s well and good. No need for false progress.

    Increase tax on gambling, cigarettes, condoms, contraception, hike bail court bail. Fight corruption, reward corruption whistle blowers, release half the prisoners and let them do community services.

    Re introduce Vagabond police, fight criminals. Shoot to kill on criminals. Improve road infrastructure to s0eed progress. Never take aid from Europe to conduct seminars, buy conforms. Fight HIV through moral teaching. Stop wasting time on free circumcision. There are pressing issues to worry about.

  13. Nangozo says:

    Ng’ombe yayimuna kuvutika kukoka ngolo. Zimapweka ziri pa wina.

  14. Nganga says:

    Goodall is useless! He was brilliant when he was young. Age has overtaken him.

  15. Nyama Banda says:


  16. chimwemwe says:

    Goodall and chuka yo womera exporters achite retain 100% of export proceeds, limbe leaf JTI and exporters are hoarding forex and making enormous profits at the expense of poor malawians, shame on you polciy makers

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