The National Statistical Office (NSO) is in the process of rebasing the country’s inflation from 2012 as base year to 2017.
The development will help Malawi’s inflation to be more reflective of the situation on the ground.
The development comes at a time when the country’s inflation has been sailing in single digits since August 2017.
As of December 2017, inflation was recorded at 7.1 percent, down from
7.7 percent in November.
Briefing business journalists in Mangochi recently Thursday, NSO’s Alick
Mphonda said Malawians should expect rebased inflation figures in the coming months.
Mphonda said NSO rebases inflation periodically to ensure that the Consumer Price Index (CPI) is reflective of the prevailing situation.
The process could also see authorities changing the weighting of various items in the CPI to reflect consumer’s spending patterns.
Currently, food is the major contributor to the CPI with a weightage of 50.2 percent, followed by housing and water at 14.7 percent.
Transport has a weighting of 6.6 percent, communication 5.8 percent, clothing and footwear 3.2 percent, miscellaneous three percent, alcoholic beverages 2.5 percent, recreation and culture 2.2 percent and health at 1.4 percent.
Analysts believe there is need to slash the weighting of food in the CPI, which results in inflation declining every time the country has food in abundance despite upsurges in non-food inflation.
Elsewhere, rebasing inflation has resulted in either inflation shooting up or shrinking, depending on the situation in the economy.
Chancellor College economics professor, Ben Kalua, said it is crucial for economies to rebase inflation so that the figures reflect changes in spending patterns overtime.
Reserve Bank of Malawi (RBM) Governor, Dalitso Kabambe, recently indicated that monetary authorities are committed to ensuring that inflation remains within the single digit band for the rest of 2018.