Headline inflation—the rate at which commodity prices change at a given time in an economy—inched up in April to 32.3 percent, contrary to expectations.
The performance has also affected to outlook for a possible deceleration of inflation as Malawi gets to the peak of the harvest season.
Consumer Price indices (CPI) published by the National Statistical Office (NSO) indicate that the year-on-year inflation rate for April 2024 is 32.3 percent, an increase from the 31.8 percent recorded in March 2024.
The food and non-food inflation rates were recorded at 39.9 percent and 22.4 percent, respectively.
Economics Association of Malawi (Ecama) President Bertha Chikadza said the slight rise in overall inflation confirms that the domestic economy is still fragile.
“The effects of El Nino have not dissipated and food inflation remained elevated even in the month of March.
“Going forward, maize prices are poised to moderate, and food inflation will moderate slightly while overall inflation is forecast to remain elevated, with non-food inflation remaining broadly unchanged,” Chikadza said.
In a separate interview, economist Marvin Banda said the agricultural harvest season also has a lagged effect on food prices.
He said with progression during the quarter, the country should expect further decreases in month-on-month inflation.
“Inflation is expected to taper off from November onward unless there are more shocks to the macroeconomic factors that determine inflation in Malawi.
“In the meantime, inflation will continue to decrease until we hit the trough of the agri-business cycle from whence prices begin to pick up again considering that 53+ percent of the CPI is food based. So scarcities drive up the inflation again from the end of the second quarter,” Banda said. Recently, the Reserve Bank of Malawi maintained the policy rate at 26 percent in an attempt to contain inflation.
