Cost of living down 12%, workers still bearing brunt
Despite the cost of living easing by 12 percent in the first six months of this year, the Centre for Social Concern (CfSC) says low wage earners are still bearing the brunt.
Based on figures from CfSC, a faith-based socio-economic think-tank, the cost of living—the cost of maintaining a certain standard of living—has declined from K223 173 for a family of six in January to K197 980 in June.
CfSC estimates show that food poverty line was at K94 000 in June against the minimum monthly wage at K35 000.
In an interview on Monday, CfSC economic governance programmes officer Banard Mphepo said despite the decline in inflation rate, now at eight percent, and cost of living, minimum wage earners were far from enjoying the benefits on their household spending.
“The high cost of living entails that majority of Malawians are not able to meet costs of essential services such as health and education,” he said.
On his part, consumer rights activist John Kapito said in an interview the cost of living figures do not necessarily reflect the market behaviour, adding that the most hurt are the poor and those whose minimum wage is at K35 000 or below.
He said: “These people are currently living in total hardship. Unfortunately, the system is unable to understand how the current economic challenges fuelled by the Covid-19 pandemic are hurting the majority of Malawians.”
A Blantyre-based resident, Paul Bakali, who recently lost his K45 000 gardening job now depends on wife to provide for the four-member family with her K40 000 salary she earns as a day-time house help.
“It is difficult for us. I have ventured into charcoal selling and on average, I get a profit of K3 000 which goes straight into consumption,” said Bakali who resides in Chirimba.
The country’s inflation rate, which has followed the pattern of cost of living, has been on a downward path since peaking at 11.5 percent in December 2019 an is now at eight percent as of July this year, according to National Statistical Office.
On average, headline inflation rate decelerated to 8.9 percent in the second quarter of 2020 from an average of 10.6 percent in the first quarter of 2020.
Reserve Bank of Malawi figures show that on average, food inflation rate declined to 13.9 percent in the second quarter of 2020 from 16.4 percent in the previous quarter on the back of declining maize prices.
