Reserve Bank of Malawi sees 2020 inflation at 8.8%
The Reserve Bank of Malawi (RBM) says it expects inflation to average 8.8 percent, which is a drop from 9.4 recorded in 2019.
The central bank says prospects are that inflation will remain in a disinflation cycle.
The projection is on the back of better food supply, stability in local currency, stable fuel prices and tight fiscal and monetary policies.
In a response to an emailed questionnaire, RBM spokesperson, Mbane Ngwira, said the outlook is amid some challenges the economy is facing.
“This is premised on a favourable crop season envisaged and continued exchange rate stability,” Ngwira said.
He said the recent fall in global oil prices amidst geo-political tensions among oil producing countries, would contribute towards a drop of the inflation.
However, the projection comes amid a slowdown threat to some economies on the globe posed by spread of Coronavirus.
Malawi has not registered any Coronavirus cases this far.
“Nevertheless, coronavirus will definitely have an impact on travel, international trade, and tourism industry.
“Our major import countries such as South Africa and China have reported cases. Most of merchandise in stores is generally imported, so the more travel restrictions, the more likely will stocks in stores start to dwindle,” Ngwira said.
In an earlier interview, Economics Association of Malawi Acting Executive Director, Kettie Nyasulu, said effects of the virus spread are already being felt.
Malawi’s headline inflation rose to an average of 9.4 percent in 2019, affected by biting food prices.
The 2019 average inflation is 0.2 percentage points higher than the 9.2 percent recorded in 2018.
The development meant that the RBM missed the inflation target of 9.2 percent for 2019 by 0.2 percentage points.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.