Malawi’s headline inflation hit 26.7 percent in October this year, the highest record since June 2013, when it reached 27.9 percent.
During the same period last year, the inflation rate was sailing in a single digit at 9.8 percent.
The October 2022 rise in inflation rate has been attributed to the rise in both food and non-food inflation, which has reached 34.5 percent and 18.6 percent, respectively, from 33.4 percent and 18.2 percent in the preceding month.
Economist from Malawi University of Business and Applied Sciences Betchani Tchereni said even though the inflation rate may not rocket further, the rate at which it is rising is a cause for concern.
“The problem is that we have left the issue of inflation to Reserve Bank of Malawi (RBM) alone while we need to know that in Malawi inflation is not a monetary issue but an issue to do with production; we are not producing what we consume,” he said.
Inflation rate, whose curve seemed to be flattening, is raising again a tight monetary policy stance by the Reserve Bank of Malawi which has included adjusting upwards the policy rate twice this year alone.
In May, RBM adjusted the rate upwards to 14 percent from 12 percent and this month the central bank tightened the rate further by raising it to 18 percent from 14 percent.
The central bank indicated in a statement that the rationale behind the raise is to arrest inflation.
“In order to tame inflation and manage expectations, it was necessary that the stance of monetary policy be tightened to restore macroeconomic stability considering this is also a necessary condition for economic growth,” the statement reads.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.