The Centre for Social Concern (CfSC) has called on the Malawi government to take radical decisions that would ease the economic pressure being faced by a majority of people in the country through the increase in the cost of living.
CfSC programme officer for economic governance, Mathews Kafunda, said in an interview that there is a need for good polices and economic management that can help slow down inflation and provide relief to the people.
He mentioned fiscal discipline by the government as a key means of reducing pressure on inflation.
“The drivers of inflation are both monetary and non-monetary. Monetary ones include supply of money which is under the authority of the Reserve Bank of Malawi. The other driver is large fiscal deficit which makes demand for goods high in excess of the supply,” said Kafunda.
CfSC warns that the buying power of many people would continue to dwindle in the country if the government does not start taking effective measures to curb inflation.
The centre says commodities p r ices would continue to skyrocket due to the continued rise in inflation.
“The cost of goods in basic needs basket shows that commodity and service prices are rising indeed. The normal trends of the basket are that from January up to somewhere in March, the cost of items in the basket tends to skyrocket and eventually affecting the cost of living,” he said.
Kafunda said through various studies conducted this far, the basket items collected in the different markets show that the prices for various items and commodities are on the upward spiral.
This, he said, has been influenced by the rising inflation which was expected to close the year 2015 at 26.2 percent.
“With high inflation, the value of money is never the same. Under these circumstances, people can’t afford the goods and services they could buy some months as the value of their buying power has been eaten into by the inflation,” said.