Malawi inflation rate drops, Finance Minister sees annual inflation at 18 pct
Malawi inflation has shed a 1.5p percentage points on the February figure to 36.6 percent in March, the National Statistical Office (NSO) has said.
But the fall in the rate of inflation does not imply a fall in the price of goods. Rather, NSO attributed the ease on mounting pressure on inflation rate during the month to the improved availability of food, especially cereals—especially availability of maize— as it dictates the movement in the Consumer Price Index (CPI), the basket employed by the statistical body to compute inflation figures.
“Food inflation has started to decline, owing mainly to the availability of cereals in some parts of the country,” said NSO in its inflation update on its website at the weekend.
“Non-food inflation has gone up due to the upward adjustment in the price of gasoline and its derivatives. However its impact on overall inflation has largely been offset by the decline in food inflation.”
Malawi Finance Minister Ken Lipenga predicted annual inflation, as measured by the consumer prices index, would slow to an average of 18 percent this year, helped by a bumper crop and strong tobacco prices.
Lipenga is on record that Malawi would be able to meet a growth target of 5.5 percent this year, adding it was committed to pushing through structural reforms and drawing foreign investment.
“For the first time in many years we are so much looking forward to a bumper harvest this year and good tobacco prices,” Lipenga said.
Soaring food and fuel prices have been stoking inflation since President Joyce Banda eased the kwacha’s peg against the dollar and devalued the currency by 49 percent.
Since taking the helm of one of the world’s poorest countries last year, Banda has been working to restore foreign aid withheld during the final days of her predecessor’s tenure after he picked a fight with key donors.
Overseas aid traditionally accounts for about 40 percent of the national budget.
An economist who spoke to Nyasa Times in Lilongwe said “Lower inflation doesn’t put more money into households’ pockets, it simply reduces the rate at which it’s removed.”
Meanwhile, Reserve Bank of Malawi (RBM) Governor Charles Chuka told a local daily that here were strong indications that the economy would begin to stabilise.
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