Malawians will be paying 0.3 percentage points less on goods and services following the fall of the inflation rate last month to 15.8 percent from 16.1 percent in February.
The recent downward trend in the inflation rate is largely attributed to the decrease in the price of maize which, as part of the food inflation component, has a huge weight in the consumer price index (CPI)—an aggregate basket of goods and services National Statistical Office (NSO) uses to compute the inflation rate—at 50.1 percent.
NSO said in a statement yesterday that the drop in inflation is largely on account of the decrease in food inflation which has eased to 17 percent in March from 17.5 percent in February.
Reads the statement in part: “The urban and rural rates stand at 13.0 percent and 18.0 percent, respectively.”
The slight drop means that prices of goods and services are softer in urban areas as compared to rural areas.
Maize prices continue to drop with a 50 kilogramme (kg) bag now selling at as low as K3 500 in some areas.
During the same period last year, inflation rate stood at 22.1 percent and this means that prices are softer this year than during the same period last year.
Recently, the Economic Intelligence Unit (EIU) had projected Malawi’s inflation to fall to single digit early 2018.
In recent interviews, Minister of Finance, Economic Planning and Development Goodall Gondwe and Catholic University head of economics department Gilbert Kachamba agreed with the EIU forecasts, although Gondwe said the single digit inflation might be achieved earlier than forecasted.
However, Malawi Economic Justice Network (Mejn) executive director Dalitso Kubalasa has urged consolidation for achievements made towards attaining macroeconomic stability, including the easing of inflation by sealing all fiscal policy loopholes and monetary policy potential slippages.
He said the positive trajectory feat after five years of inflation rates in excess of 21 percent should be viewed as a trigger for more collective action and positive energy with much caution as possible without losing sight of where the country is heading to. n