Inflation decelerated by 1.2 percentage points in March 2020 to 9.8 percent, thanks to continued declining food prices, figures from National Statistical Office (NSO) show.
The headline inflation is, however, 0.5 percentage points higher than the 9.3 percent rate recorded in March 2019.
According to the NSO figures, in the month under review, non-food inflation stood at 5.1 percent compared to 5.4 percent recorded in February, 2020.
Food inflation rate was seen at 14.7 percent compared to 17.6 percent in February, 2020.
This comes as this year’s harvesting season is almost at its peak now, with farmers from most districts of the Southern 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 its 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.
According to the report, average retail maize price was, however, 79 percent higher than in March 2019.
Maize, as part of the food component, impacts inflation movement heavily given that it constitutes 45.2 percent in the consumer price index.
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.
In an interview yesterday, Economics Association of Malawi president, Lorraine Nyasulu, said the drop in inflation was expected.
She said stability in key microeconomic indicators, including inflation, would help ease pressure from exogenous shocks including possible effects of Covid-19.
“This is good news despite being seasonal. It is important to maintain a stable inflation rate going forward to offset possible effects of external shocks to the economy,” Nysaulu said.
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.