Inflation drops 0.6 points to 24 percent
Malawi’s year-on-year inflation as measured by the Consumer Price Index (CPI) dropped by 0.6 percentage points to 24 percent in March 2014 compared to the previous month, apparently due to falling maize prices.
The National Statistical Office (NSO) flash further indicates that during the month, urban inflation dropped to 34.3 percent in March from 34.4 percent the previous month.
The statistical flash also shows that rural inflation dropped to 19.2 percent in March from 24.4 percent in February.
Experts have attributed the recent falling inflation to receding food prices due to increased maize availability and the appreciation of the kwacha against major trading currencies.
According to Reserve Bank of Malawi (RBM) statistics, the local unit has gained about seven percent from K449.11 to K417.52 between January 3 and April 14.
The analysts note that as inflation pressures ease, the prices of goods and services may fall or stabilise, leaving more disposable incomes for both incomes and households.
They, however, warn that the recent 37.3 percent increase in electricity tariffs will add inflationary pressures as the general prices of goods and services rise creating a cost push inflation.
Looking ahead, the Economist Intelligence Unit (EIU) expects average inflation to fall to 19.6 percent this year compared to 28.6 percent in 2013, as a result of falling global food prices and aid funded subsidies for poor households.
The International Monetary Fund (IMF) expects end-2014 inflation to drop to 9.7 percent from from 23.5 percent in December 2013 while the annual average is projected at 15.1 percent.
