Malawi inflation rate tapped a single digit to 9.93 percent in May, the central bank said, the first time it has dropped into single digits since 2010.
According to NSO, the current inflation rate indicates a decline of 0.9 percent from the month of July, 2017.
The urban and rural rates stand at 8.9 percent and 9.8 percent respectively. Overall, food inflation stands at 6.2 percent from 7.4 percent in July 2017 while non-food inflation stands at 12.2 percent from 12.7 percent in July 2017.
This year, Malawi produced more than 30 percent surplus in maize owing to good climatic conditions after two successive years of low output due to drought and floods.
NSO figures released show that August inflation rate has eased by 0.9 percentage points from July’s 10.2 percent.
During the same period last year, inflation was at 22.8 percent, and this shows that prices of goods and services have increased at a much more reduced rate.
Reads the NSO Stats Flash: “The urban and rural rates stand at 8.9 percent and 9.8 percent , respectively. Overall, food inflation stands at 6.2 percent from 7.4 percent in July 2017 while non-food inflation stands at 12.2 percent from 12.7 percent in July 2017.”
The dropping of inflation to single digit coincides with the stabilization of Kwacha which, according to NICO Asset Managers report, has relatively stabilized e in August this year depreciating marginally by 0.21 percent against the US Dollar.
The report attributed the Kwacha stabilization to good economic prospects and increased level of foreign exchange reserves may cushion the magnitude of depreciation.
It reveals that the country’s forex reserves remained above the minimum three months. As of 31 August 2017, total forex reserves stood at US$1,027.33 million or 4.91 months of import cover, compared to 4.54 months of import cover at the same time last year.
Meanwhile, experts have warned that the single-digit inflation does not mean prices of commodities are going down or that the economy has recovered, but that the rate at which the prices rose has slowed down.
They also argue that current inflation rate means that some room has been created for other economic factors such as interest rates and the exchange rate to improve,” commented Khanje in his assessment.