Malawi’s headline inflation inched up by 0.8 percentage points to 10.4 percent in November as food prices continued biting hard, a development the Reserve Bank of Malawi (RBM) says is still manageable.
Published figures from National Statistical Office (NSO) show that food inflation stood at 17.2 percent in November while non-food inflation was seen at 5.5 percent in the review month.
Price for maize, Malawi’s staple food, has been on an upward spiral in the past months, currently trading at at as much as K360 per kilogramme (kg), translating to K18 000 per 50kg bag in some parts of the country.
Maize, as part of the food component, impacts the country’s economy given that it constitutes 45.2 percent of the Consumer Price Index (CPI), which is an aggregate basket of goods and services for computing inflation.
But Reserve Bank of Malawi (RBM) spokesperson Mbane Ngwira has however said the bank is not shaken with the slight movement saying though inflation may rise slowly, they would still beat their target.
“We project average inflation for 2019 to still be in single digit. This is premised on the fact that during these months, private traders will be offering their stock of maize for sale in market, so too Admarc. We therefore maintain our target of 5 percent inflation during the first quarter of 2021,” he said.
In its latest economic review report, Investment and advisory firm Nico Asset Managers also projected a rise in inflation owing to the rising food prices, maize, in particular.
“Malawi Energy Regulatory Authority announced 5.72 percent and 7.14 percent increases in diesel and petrol pump prices respectively which is expected to lead to increased transport costs for traders and additional upward pressure on prices. A combined effect of these occurrences will most likely lead to an increase in the headline inflation in the short run,” said Nico Asset.
When presenting the 2019/20 budget delivered in parliament last week, Minister of Finance, Economic Planning and Development Joseph Mwanamvekha was positive the macro-economic environment will maintain a positive stance.
“In 2019, inflation is estimated to continue declining to an annual average of 8 percent. Looking ahead, inflation is expected to continue declining to a 6.1 percent in 2020,” said Mwanamvekha.
Malawi’s annual rate of inflation has been falling steadily since June 2016 helped by declining food prices, a relatively stable Kwacha and lower international fuel prices.