Malawi’s headline inflation fell by 1.7 percentage points to 31.8 percent in March from 33.5 percent in February, thanks to improved food availability.
According to the National Statistical Office, food inflation fell from 42 percent in February to 38.8 percent.
Non-food inflation on the other hand rose by 0.1 percent from 22.1 percent to 22.2 percent.
“The year-on-year inflation rate for March 2024 is at 31.8 percent, a decline from the 33.5 percent recorded in February 2024. Food and non-food inflation rates are at 38.8 percent and 22.2 percent, respectively. The national month to month inflation rate for March 2024 stands at 0.9 percent. Food inflation rate is at 1.0 percent while non-food inflation rate is at 0.8 percent.
“The urban month to month inflation rate is at 0.9 percent. Urban food and non-food inflation rates stand at 1.2 percent and 0.5 percent, respectively. The rural month to month inflation rate is at 0.9 percent. Rural food and non-food inflation rates stand at 0.9 percent and 1.0 percent, respectively,” the inflation bulletin by NSO reads.
Commenting on the development yesterday, Reserve Bank of Malawi (RBM) Deputy Governor for Economics and Regulation MacDonald Mafuta Mwale said the fall in inflation is in line with the bank’s expectations.
According to Mafuta Mwale, Malawians should expect the downward trajectory of inflation to continue in the coming months.
“We expect the downward trajectory in inflation to continue for a while on account of the onset of the agriculture marketing season, when availability of food items including maize will lead to further reduction of prices,” Mafuta Mwale said.
He observed that, depending on continued government activities in ensuring food availability, especially in the Southern Region, inflation is expected to drop all the way to 18 percent in December 2024 on its way to a single digit of 9.8 percent in December 2025.
Mafuta Mwale, however, acknowledged that the path to single digit inflation will likely be winding and bumpy due to the uncertain impact of El Nino weather conditions, wage increase demands and fuel price developments on the international scene.
“These upward risks to inflation call for concerted efforts on the fiscal and monetary policy front to safeguard the smooth economic path to macroeconomic stability.
“The onset of the agriculture marketing season also signifies increased availability of foreign exchange from the country’s exports of tobacco, legumes and other cash crops, thereby easing pressure on the Kwacha and non-food inflation,” Mwale said.
The recent Malawi Economic Monitor published by the World Bank notes that inflationary pressures will persist in the short term but are expected to ease toward the end of 2024.
“This projection is based on both the expected reduction of short-term effects from the exchange rate adjustment and the implementation of supportive macroeconomic and structural policy reforms.
“Nevertheless, the ongoing El Nino season may lead to lower-than-expected agricultural production and sustained elevated food prices. Looking ahead, the implementation of prudent monetary and fiscal policies is essential to mitigate the impacts of these factors and lower inflation sustainably,” the report reads.
