Economist advises govt to tame inflation


Chancellor College based economics professor Ben Kalua has said there is no better time for the country to tame the run-away inflation than now, if it is to attain the 14.2 percent rate projection by June.

On Friday, Kaluwa said given the fact that the economy does not expect a good harvest this year due to dry spell in some parts of the country, attaining a 14.2 percent inflation target would require concerted effort.

The Reserve Bank of Malawi (RBM) last week projected a drop in the annual headline inflation to 14.2 percent by mid this year owing to what it said potential increase in the agricultural output.


Kalua said there are several factors that both the monitory and fiscal authorities have to implement if the rate of inflation is to drop.

“June would be the time people finish harvesting and as the inflation is heavily influenced by food supply, to say that then we would attain 14 percent is somehow unrealistic.

“There is need for the government to start working now by among other things tallying expenditure with available revenue. Over expenditure by the government is partly to blame,” said Kalua.


He further tipped the authorities to adopt deliberate measures that would help in the diversification of food supply by going into commercial maize production than relying on small scale farming only.

Kalua further said going forward; the economy needs to diversify its export base.

“That would take care of the major areas which push inflation upwards,” he said.

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