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May inflation eases to 8.9%

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Ben Kalua

Headline inflation eased by 0.3 percentage points to 8.9 percent in May, latest figures from the National Statistical Office (NSO) show.

The rate is also 0.2 percentage points higher than the 8.7 percent inflation rate recorded in the same month last year.

The NSO further records that food and non-food Inflation rates went down to 11 and 7.1 percent, respectively.

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“The urban month to month inflation rate is -0.5 percent. Urban food and non-food inflation rates stand at -1.6 and 0.1 percent, respectively. The rural month to month inflation rate is at -2.6 percent. Rural food and non-food inflation rates stand at -4.6 and 0.1 percent, respectively,” reads a Consumer Price Indices newsletter published by the NSO.

University of Malawi Professor of Economics Ben Kalua said the development reflects seasonal trends of the economy as the country is at the peak of the harvesting period.

“The month of May is peak of maize harvesting and maize is the major driver of inflation in Malawi. But I expect inflation to stabilise and I do not expect further reduction in the rate but from next month (August) it may start to increase,” Kalua said.

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Executive Director of the Economics Association of Malawi (Ecama) Frank Chikuta, however, said the outlook remains mixed.

“Most likely, the food inflation is going to continue decreasing but non-food inflation movement would depend on the strength of the Kwacha against other currencies.

“With the third wave of Covid, we have also seen economies starting to respond with restrictions and lockdowns and that will also have a bearing on inflation trends in coming months,” Chikuta said.

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