Inflation now at 8.1%


Despite a process to rebase the Consumer Price Index (CPI), year on year inflation is still holding within single digits recorded at 8.1 percent in January, according to latest figures released by the National Statistical Office (NSO).

Food inflation is at 7.6 percent while non-food inflation was recorded at 9.6 percent. The urban month-on-month inflation rate stands at 2.3 percent. Urban food inflation is at 6.2 percent and non-food inflation at 0.2 percent.

Although the figure for January has slightly picked from the 7.1 percent inflation rate for December 2018, NSO has said this should not be cause for alarm as the weights in the inflation basket for January 2018 are not the same as those used previously before the changes were effected.


Statistician in the NSO Pricing Division, Imran Chiosa, said the new CPI weights are based on monetary expenditures relating to consumption for all households (both urban and rural) derived from the Fourth Integrated Household Survey conducted between 2016 and 2017.

Chiosa said improvements that have been made include reducing the weightage of food in the inflation basket from 51 to 45.2 percent and reviewing the weighting of housing and utilities to accurately reflect changes in spending patterns.

“The current CPI has been constructed in such a way that it facilitates the computation of indices by item, class, group and division of commodities and even by income levels of households in all cities.


“By reducing the weight of food, it means the impact of food on the inflation will be less,” he said.

Further, the new CPI has incorporated a number of methodological improvements including the continued use of geometric means (Jevons formula) for compiling elementary index aggregates, the use of an improved index compilation system, and improved procedures for collecting and processing prices.

Many sections of society were calling on authorities to review the CPI as it was felt that inflation figures were not accurately reflecting spending patterns among majority Malawians.

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