Reserve Bank of Malawi, Ecama upbeat on inflation lowering
The Economics Association of Malawi (Ecama) has said it expects inflation to continue lowering in the coming months, estimating it to be at 8.9 percent by December 2019.
This comes as Malawi’s headline inflation eased by 0.3 percentage points to 9.2 percent in September 2019 from 9.5 percent in August, according to figures from the National Statistics Office.
Ecama Executive Director, Maleka Thula said the trend is a result of fading speculation among economic agents especially merchants that were hoarding maize, anticipating to sell once prices rise.
Maize, as part of the food basket, impacts heavily on the country’s economy given that it constitutes 45.2 percent in the Consumer Price Index-an aggregate basket of goods and services for computing inflation.
“In the next two months, inflation may continue dropping to hit 8.9 percent or thereabouts, but that is going to give us a good ground preparing for the next season.
Reserve Bank of Malawi spokesperson, Mbane Ngwira said with recent trends on maize market, the central bank expects inflation to remain on a downward spiral.
“Maize prices have stabilised and recently, we have seen the government disbursing maize in some parts of the country especially those affected by hunger and the sustained non-food inflation so we should expect inflation to remain within the single digit band,” Ngwira said.
Earlier, RBM revised upwards the 2019 annual inflation projection from eight percent to nine percent owing to elevated maize prices.