Inflation eases to 9.2 percent
Malawi’s headline inflation eased by 0.3 percentage points to 9.2 percent in September 2019 from 9.5 percent in August, latest figures from the National Statistics Office (NSO) show.
This is first time for inflation to drop since May this year. However, the rate remains high when compared to this year’s lowest record of 7.9 percent registered in February.
The NSO figures show that food inflation stood at 13.9 percent in the month under review from 14.6 percent in August 2019.
This is despite a stable increase in maize prices, Malawi’s staple food, currently trading between K12,500 and K15,000 per 50 Kilogramme bag in some parts of the country.
Maize, as part of the food basket, impacts heavily on the country’s economy given that it constitutes 45.2 percent in the Consumer Price Index-an aggregate basket of goods and services for computing inflation.
However, non-food inflation remained low maintaining an August record at 5.4 percent in September.
Earlier, RBM revised upwards the 2019 annual inflation projection from eight percent to nine percent owing to elevated maize prices.
Executive Director of the Economics Association of Malawi (Ecama) Maleka Thula said in an interview Monday that move is expected to trigger similar movements in other macroeconomic fundamentals.
“Inflation outturn for the month is a positive development as it is expected to anchor inflation expectations going into the lean period, otherwise, previous increases in inflation were worrisome and a threat to macroeconomic stability given that as a country we registered higher maize outturn this year compared to last year.
“However, food inflation was creeping up causing fears of inflation dynamics going forward. Given the decline, we expect that several other macroeconomic parameters will perform favorably,” Thula said.
In a recent interview, professor of economics at the Chancellor College, Ben Kalua warned that inflation projections by authorities are based on wrong assumptions.