Last month’s 44 percent Kwacha devaluation pushed Malawi’s headline inflation to a record high of 33.1 percent as commodity prices continued to soar.
Malawians are feeling the pinch of the Kwacha realignment effected early November which has led to rocketing of most commodity prices in the net importing country.
Figures from the National Statistical Office (NSO) show that headline inflation—the rate at which commodity prices change at a given period in an economy—went up in November 2023 from 26.9 percent in October.
The jump is a decade record high as it was seen at 35.8 percent in April 2023. NSO figures show that in the month under review, food inflation rose to 41.7 percent from 34.5 percent in October while non-food inflation was at 22.2 percent from 17.6 percent in the preceding month.
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The national month-to-month inflation rate for November 2023 stood at 7.6 percent where the food inflation rate is at 9.3 percent while the non-food inflation rate is at 5.2 percent.
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“The urban month to month inflation rate is at 8.8 percent. Urban food and non-food inflation rates stand at 10.6 percent and 6.7 percent, respectively.
“The rural month to month inflation rate is at 7.0 percent. Rural food and non-food inflation rates stand at 8.7 percent and 4.2 percent, respectively,” the report reads.
Economics Association of Malawi President Betchani Tchereni said the increase in headline inflation emanated from pressure of the Kwacha devaluation.
He said the outlook remains mixed as trends stabilise on the global market.
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“The outlook is that the rising inflation rate should stabilise, especially imported inflation. The food inflation continues to be a concern and this may be a source of instability,” Tchereni said.
Speaking recently, Consumers Association of Malawi Executive Director John Kapito predicted that the recent 44 percent devaluation of the Kwacha would exert more pressure and lead to continued rise in commodity prices.
“Government should therefore be cautious in dealing with the inflation because a lot of cushioning by providing money to people may also result in higher inflation because there will be a lot of money on the market chasing few goods,” Kapito said.
Inflation has been on an upward spiral in the past 24 months. In its latest Monetary PoliNcy Committee report, the Reserve Bank of Malawi said upside risks to inflation remain, largely arising from continued pass-through of exchange rate depreciation to domestic prices, owing to the protracted foreign exchange supply challenges.
It added that consistent with the aforementioned factors, the 2023 headline inflation is projected at 28.2 percent, about 1.3 percentage points lower than the 29.5 percent forecast at the previous MPC meeting
