Despite registering a decline in September 2023 from 28.6 percent in August to 27.8 percent, Malawi’s headline inflation remains the highest compared to neighbouring countries.
According to the Reserve Bank of Malawi (RBM) September 2023 Market Intelligence Report, Tanzania and Mozambique continue to enjoy single digit inflation, with Zambia just outside the single digit territory.
The report says of Malawi’s neighbours, Tanzania has the lowest headline inflation at 3.3 percent in September 2023 followed by Mozambique at 4.6 percent.
Zambia is further behind with a headline inflation of 12 percent.
“Tanzania’s inflation rate remained steady at 3.3 percent in September 2023, as in August 2023. The outturn was explained by moderation in the prices of both food and non-food items. Resultantly, the average quarterly inflation rate for 2023Q3 was 3.3 percent, down from 4.0 percent in 2023Q2,” the report reads.
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It says inflation in Mozambique decreased for the sixth consecutive month to 4.6 percent, the lowest level since January 2021, from 4.9 percent in the preceding month.
This was due to price decreases in housing, utilities, transportation, food, non-alcoholic drinks, recreation, and culture. Resultantly, Mozambique’s average inflation rate for the third quarter of 2023 stood at 5.1 percent against 8.2 percent in 2023Q2.
According to the report, South Africa inflation was seen at 5.4 percent from 4.8 percent in August.
“This was a modest increase. However, it was still well within the 3 percent to 6 percent target range set by the South African Reserve Bank. The primary drivers of inflation were food and nonalcoholic beverages and transportation costs.
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“In addition, the cost of housing and utilities exerted pressure on inflation. However, inflation for 2023Q3 dropped to 5.0 percent from 6.2 percent in the previous quarter,” the report says.
Namibia’s inflation was seen at 5.4 percent, Nigeria 26.7 percent, Angola 15 percent, Rwanda 18.4 percent, Botswana 3.2 percent, Kenya 6.8 percent, Ghana 38.1 percent and Uganda 2.7 percent.
At its meeting last week, the Monetary Policy Committee (MPC) of RBM noted that inflationary pressures had somewhat abated during the third quarter of 2023, resulting in a marginal slowdown in average headline inflation to 28.2 percent from 28.4 percent in the previous quarter.
RBM Governor Wilson Banda said in a statement that the outcome was explained by developments in non-food inflation which decelerated to an average of 16.4 percent in the third quarter of 2023, from 17.6 percent in the preceding quarter, an outcome which was attributed to a relatively tight monetary policy environment and lower imported inflation.
“In contrast, the MPC noted that food inflation edged up to 38.5 percent in the third quarter of 2023, compared to an average of 38.0 percent in the previous quarter.
“The moderation in food prices was partly attributed to maize sales in some selected Admarc depots. However, upside risks to the inflation outlook include exchange rate movements, increases in crude oil prices and adverse weather conditions,” Banda said.
Malawi habours an inflation target of five percent in the medium term.
