Economic experts have called on the government to scrutinise the effectiveness of fiscal and monetary policies, adopt an anticipatory approach to external and global economic trends and modernise farming practices to contain inflationary pressure.
This is coming at a time inflation has been rocketing, jumping by 19.43 percent within the past five years from 9.37 percent in 2019 to 28.8 percent in 2023.
In an interview, Centre for Social Concern (CfSC) Project Officer Kondwani Hara said there is also a need to evaluate the government’s spending patterns and the central bank’s monetary measures.
“Malawi’s susceptibility to external influences underscores the importance of monitoring global economic trends. Fluctuations in commodity prices, exchange rates and international economic conditions can significantly impact domestic inflation.
“An anticipatory approach to these external factors will aid in proactive economic management,” he said.
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In a separate interview, Economics Association of Malawi Vice President Bertha Chikadza said the government should intensify mass agricultural production.
“This is being mindful of traditional demand management tools for addressing inflation; for example, slowing domestic borrowing or raising interest rates assume inflation is driven by government misbehaviour,” Chikadza said.
Another economist Marvin Banda added that abolition of non-performing government programmes such as the Affordable Inputs Programme and increased taxes.
“Furthermore, RBM needs to decide which inflation cause is more important to tackle, imported inflation or government spending-led inflation.
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“The latter is the worst in my opinion because it is by far the hardest to control but surely the most damaging, but how else do you convince those who are politically invested to cut spending if not by raising their cost of borrowing?” Banda said.
In an earlier interview, RBM spokesperson Mark Lungu said the Monetary Policy Committee (MPC) of the bank is bound to meet.
“The Monetary Policy Committee will have its first meeting for 2024 at the end of January 2024 and will give the best outlook and measures that the bank will put in place,” Lungu said.
