The cost of living for a family of six living in an urban setting increased moderately by 0.95 percent to K349,865 in May from K346,580 in April, figures from the Employers Consultative Association of Malawi have shown.
However, the May cost of living has increased by 50 percent when compared to the K233,235 recorded in May last year.
In an interview, Executive Director of the Economics Association of Malawi Frank Chikuta indicated that the expectation was that the rise could be sharp but might have been cushioned by a slow-down in food inflation due to the harvesting season coupled with stable prices in some services such as rent.
“I don’t know which centres they conducted their study from but I think May was a difficult month; one would have expected a sharp rise in the cost of living. Of course, items like housing do not rise every month; so, they could cushion the cost of living but we should expect continued increase in coming months.
“There will be the impact of increase in fuel prices and other strategic commodities but food inflation may stabilise until September or thereabout but it may be offset by the increase in prices of other items,” Chikuta said.
In a separate interview, Director for Centre for Research and Consultancy Milward Tobias suspected that the basket of goods considered in the basket comprise basics for a family to merely survive.
“The average cost, however, is above average earnings for the majority low income earners. For families where only one person is bread winner, this cost of living means that many households are struggling. The assessment might have taken place before the devaluation; so, the situation now could be worse than was found.
“We need long lasting solutions to keep drivers of cost of living in check. The solutions include policies for affordable housing, cheap transport and reasonable cost of food,” Tobias said.
In a recent interview, Reserve Bank of Malawi Governor Wilson Banda said the recent devaluation of the Kwacha was going to cushion Malawians from scarcity of commodities on the market which could have triggered unnecessary price increases.
He said between 2010 and 2012, when Malawi adopted a fixed exchange rate regime, goods were scarce across the board from fuel to household items.