The Reserve Bank of Malawi says the headline inflation rate will continue rising in 2023 on account of increasing food inflation.
The central bank says this in the third monetary policy committee meeting report published on Tuesday.
The central bank says upside pressures have emerged from both supply and demand-side factors, evident in rising food inflation during the harvest period in the second quarter of 2023.
In the report, RBM says pressures are likely to emanate from elevated public sector financing requirements as well as exchange rate developments.
“The committee will continue to vigilantly monitor the economic developments and stand ready to take appropriate action in their quest to support the economic recovery process,” the report reads.
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Consumers Association of Malawi Executive Director John Kapito said the outlook remains murky as commodity prices will continue rocketing.
“There seems to be no room or strategy to assist consumers. Unfortunately, our economy does not have any coping mechanisms for consumers and especially the poor, who will be hard hit,” Kapito said.
Headline inflation accelerated to an average of 28.4 percent in the second quarter of 2023 from 26.5 percent in the first quarter.
The surge is on account of rising food inflation which rose to 38.0 percent from 31.5 percent in the first quarter.
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Non-food inflation slowed to 17.6 percent during the second quarter from 20.6 percent in the preceding quarter.
