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World Bank sees mounting poverty

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By Taonga Sabola

The Malawi Economic Monitor (Mem) released Tuesday titled Strengthening Fiscal Resilience and Service Delivery released by the World Bank has noted that the sharp rise in consumer prices will push more Malawians into poverty.

The World Bank says the continued price increase of 15 percent would result in poverty rate rising by close to three percentage points.

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According to the 2020 Malawi Poverty Report released by the National Statistical Office (NSO) in September last year, Malawi’s poverty level was seen 50.7 percent in 2019-2020.

According to NSO the poverty line in Malawi was estimated at K165,869 per year while the ultra-poverty line was estimated at K101,293 per year in 2020.

But according to the World Bank, rising prices reduce the purchasing power of households and lower the consumption of important items, especially food.

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The Bretton Woods Institution notes that the escalating prices contribute to rising incidences of food insecurity, which is expected to increase further in the coming lean season.

“Poor households will suffer more from food inflation, given the large share of food in their consumption basket.

“If inflation were to increase to 20 percent, the impact on the poverty rate would be even higher, increasing by around four percentage points,” reads the Mem.

As at May, 2022, Malawi’s headline inflation rate stood at 19.1 percent. Food and non-food inflation rates were seen at 25.5 and 13.2 percent, respectively.

Currently Malawi remains among the world’s poorest countries in the world with it’s president chairing a group of Least Developed Countries (LDCs).

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