Inflation down to record 7.1%
Malawi’s headline inflation went down by 0.5 percentage points to 7.1 percent in September, the lowest record since December 2017, latest figures from the National Statistical Office (NSO) have shown.
A Malawi Consumer Price Index newsletter published by the office on Wednesday further shows that the record represents 23 percent drop in inflation when compared to 9.2 percent recorded in September 2019.
Food inflation stagnated at 2.1 percent while Non-Food Inflation was recorded at 0.6 percent compared to 0.4 percent in August 2020.
The development, however, comes at a time the local market registered price increases in various essential commodities including as maize, Malawi’s stapple commodity, and cooking oil.
In an interview Chancellor College based Professor of economics, Ben Kalua, said despite a drop in inflation in September, Malawians should expect inflation to rise in coming months.
“The major driver of inflation in Malawi is food and the food basket is largely made up of maize. So, there must be something happening with commodity for that marginal gain. However, we should expect inflation to start rising going forward.
“The trend might have been triggered by a number of factors one could be disposal of maize by those who were holding on to the commodity in some parts of the country,” Kalua said.
In a separate interview, Centre for Social Concern (CfSC) Programmes Officer for Economic Governance, Bernard Mphepo, said reduction in the rate of inflation is also being manifested in the reduction of cost of living.
He said in July 2019, the cost of living was K197, 980 while in July 2020 the cost of living was at K165, 954 due to reduction in cost of food items as the result of good harvest by farmers.
“Last year, there was also speculative holding that created an artificial maize deficit hence increased the cost of living. Post elections demonstrations must also contributed to high rate on inflation in 2019.
“The peaceful 2020 presidential elections and reduction of covid-19 restrictions might have also contributed to reduction in cost of living it must have improved movement of goods and services,” Mphepo said.
He added that with the food market being controlled by vendors the low cost of living is expected to increase in the coming months.
“The citizen might be taken by surprise on the shortage of maize in the country since the government is not doing enough to ensure stability of food prices that include maize prices. It is therefore recommended that the government must ensure continued access to food,” He said.
