Malawi’s inflation decelerated by 0.4 percentage points in April 2020 to 9.4 percent, thanks to continued declining food prices, figures from National Statistical Office (NSO) show.
The headline inflation is, however, 0.3 percentage points higher than the 9.1 percent rate recorded in April 2019.
According to the NSO figures, in the month under review, non-food inflation stood at 5 percent compared to 5.1 percent recorded in March, 2020.
Food inflation rate was seen at 14.6 percent compared to 14.7 percent in March, 2020.
This comes as this year’s harvesting season is almost at its peak now, with farmers from most districts of the Southern and Central Region completed harvesting of the country’s staple crop, maize.
In the past three weeks, there has been an influx of maize in most traditional markets, which has helped ease the prices.
A recent report by International Food Policy Research Institute shows that retail maize prices decreased by 35 percent in March.
The decline in the prices was attributed to the onset of the harvest season, which typically starts in the South Region.
Polytechnic Economics Lecturer, Betchani Tchereni, said the month on month decline was as a result of recent cuts in fuel prices however the year on year increase is perpetuated by a slowdown in business stemming from lockdown in Malawi’s trading partners.
“Inflation should be lower at this time of the year and was expected to decelerate to 6 or 7 percent as people are harvesting, Malawi being an agri-based economy, however the impact of Covid-19 especially lockdown in trading partners coupled with implemented minimum farm gate prices which has truncated panic selling of maize among farmers,” Tchereni said.
Malawi is expected to produce about 3,691,866 metric tonnes of maize this season, up from 3,391,924 metric tonnes produced during the 2018/2019 season, representing an 8.8 percent increase.
Earlier, Reserve Bank of Malawi said it expects inflation to average 8.8 percent, which is a drop from 9.4 recorded in 2019.
The projection was on the back of better food supply, stability in local currency, stable fuel prices and tight fiscal and monetary policies but notwithstanding a slowdown threat to most economies posed by Covid-19 pandemic.
Economic experts are already describing Malawi’s 2020 economic growth prospect of 5.1 percent as a ‘big wish’ in the wake of the pandemic.