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Cost of living eases by 2%

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The cost of living was seen easing marginally by 2.5 percent in January 2021 to K209,366 for a family of six from K214, 914, latest figures from the Centre for Social Concern (CfSC) have shown.

The rate is 5.4 percent lower than the K221, 391 recorded in February last year.

However, most Malawians, especially low income earners, are still feeling the pinch of a surge in the price of basic commodities.

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Ironically, headline inflation has been on an upward spiral since November 2020, rising to 8.3 percent in February 2021 from 7.7 percent in January. This is partly attributed to a surge in non-food inflation in the aftermath of a fuel price hike.

Earlier last month, the Malawi Energy Regulatory Authority adjusted fuel prices upwards by about 17.35 percent, leading to a surge in the cost of some goods and services.

This pushed up the cost of living— which is determined by calculating the cost of essential items, both food and non-food items, for a household.

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With the trends, commentators have lamented seasonality of the economy where the cost of living usually surges during the lean period and declines towards the harvesting season.

In an interview Tuesday , CfSC Economic Governance Programmes Officer Bernard Mphepo said Malawi needed to reduce its dependency on rain-fed agriculture and invest in food storage facilities to reduce post-harvest losses

“The high cost of living in February is due to an increase in the cost of food. It is envisaged that the cost of living will be declining due to increase in supply of food items leading to reduced prices,” Mphepo said.

In a separate interview, economist Lucky Mfungwe said the trend could be checked by ensuring that the Agricultural Development and Marketing Corporation (Admarc) regulates prices of commodities especially maize on the market.

“Admarc should be able to offer reasonable prices of food commodities for Malawians so that traders should not take advantage of shortages of such commodities to increase prices even during the lean period.

“Also, instead of our farmers relying on maize alone, we must diversify agricultural production and diversify people’s diets. This will reduce demand for maize and also affect prices,” Mfungwe said.

The trend in the cost of living is also reflected in inflation trends which traditionally increase during the lean season.

For instance, between January and September 2020 inflation decreased from 11.1 percent to 7.1 percent while it increased in October to 7.5 and has been increasing to the present 8.3 percent.

During the time, the cost of living increased from K223,173 in January to K164,316 in July and increased from Augusts’ K192,644 to the present K209,366.

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