Malawi’s inflation rate as measured by the Consumer Price Index (CPI) fell slightly by one percentage point to 23.9 percent in April compared to the previous month.
The National Statistical Office (NSO) CPI dashboard indicates that urban inflation dropped to 33.7 percent from 34.3 percent while rural inflation receded to 19.1 percent from 19.5 percent.
The Reserve Bank of Malawi (RBM) has projected that the country’s inflation will fall to around 16 percent in December this year.
However, the IMF maintained Malawi’s end 2014 single digit inflation target of 9.7 percent, according to the April 2014 World Economic Outlook (WEO).
The IMF indicates that Malawi’s end of period inflation will fall from 23.5 percent in December 2013 to 9.7 percent while the annual average will fall from 28.6 percent in 2013 to 15.1 percent this year.
The fund noted that inflation is programmed to fall, based on revised monetary programme is based on RBM tightening monetary policy over the next few months and more aggressively sterilising foreign exchange inflows.
However, 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.
The analysts, however, warn that the recent increase in electricity tariffs will add inflationary pressures as the general prices of goods and services rise creating a cost push inflation.
Last month electricity tariffs were increased by 13.5 percent. The Malawi Regulatory Authority (Mera) also approved electricity tariff increase by 18.18 percent next year, 8.9 percent in 2016 and 1.9 percent in 2017.