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November inflation eases to 7.3%

A maize vendor

Betchani Tcheleni

Economic commentators have attributed a slight decline in the headline inflation for November 2020 to subdued demand for basic commodities in the recent past.

Published figures from the National Statistical Office show that year-on-year headline inflation went down marginally by 0.2 percentage points in the month under review—to 7.3 percent from 7.5 percent in October.

Food inflation rate was at 3.7 percent compared to 4.8 percent registered in October 2020 while non-food inflation stagnated at 0.5 percent.

In November 2019, headline inflation was seen at 10.4 percent.

Since December 2019, headline inflation has been on a downward spiral, except in October 2020 when it went up by 0.4 percentage points to 7.5 percent.

In an interview Sunday, The Polytechnic acting Vice Chancellor Betchani Tcheleni said, overall, there has been a shrink in demand for most commodities, albeit stability in food prices.

“We know that many people lost jobs due to the Covid-19 pandemic, businesses are yet to pick up and that fuel price was still lower then,” Tchereni said.

Economist Frank Kamanga said there was a general slowdown in economic activities in the past months, which has also influenced inflation trends in the country.

At the end of its recent Monetary Policy Committee (MPC), the Reserve Bank of Malawi resorted to slash its annual average inflation projection to 8.6 percent from 9.8 percent.

This was expected, as headline inflation has been on a downward spiral in the recent past, thanks to stability in maize prices given its weight on the Consumer Price Index.

In December last year, inflation closed on 11.5 percent with an annual average of 9.4 percent— about 0.2 percentage points above RBM’s projected 9.2 percent.

Food inflation rate during the year rose from 10.7 percent in January 2019 to 19.3 percent as at December 2019 while non-food inflation declined from 7.1 percent in January 2019 to 4.5 percent in December 2019.

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