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Rising prices push inflation to 23.5%

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Frank Chikuta

Malawi’s year-on-year headline inflation soared to 23.5 percent in June from 19.1 percent in May fueled by rise in food and non-food prices, the National Statistical Office (NSO) say.

Figures from the NSO show that food and non-food inflation rates are at 31.2 and 16.6 percent.

This means commodity prices are rising faster in the country now, compared to same time last year.

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In an interview Monday, Centre for Social Concern Programmes Coordinator responsible for economic governance Bernard Mphepo rated the situation as worrisome.

“The increase in inflation has a number of negative repercussions including inability for the citizens to save as the money will continue losing value. The other negative part is that it will be eating more into the income of consumers are more money will be channeled to consumption and that will worsen investment,” he said.

He said the rising in food inflation remains disturbing for an agrarian economy and needs rectification.

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Economics Association of Malawi Executive Director Frank Chikuta warned of persistent inflationary pressure due to among other things, the recent hike in fuel prices and increasing prices of imported food items due to the ongoing Russo-Ukrainian.

“Projections for the remainder of the year to the first half of next year show that inflationary pressures will remain elevated.

“The factors at play are the recent devaluation of the exchange rate, second round effects of the fuel price hikes and supply chain disruptions emanating from the geopolitical conflict in Ukraine,” he said.

In May the Reserve Bank of Malawi devalued the local unit, the Kwacha, by 25 percent.

Last month, the Malawi Energy Regulatory Authority raised fuel pump prices by an average of 34 percent with a litre of petrol jumping from K1,380 to K1,999, while diesel fetching K1,920 from K1,470.

This has pushed up cost of production, transport fares and prices for most other basic commodities.

The Reserve Bank of Malawi recently said exogenous shocks will continue affecting inflationary trends in the country, thereby delaying the convergence of inflation to medium-term targets.

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