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Inflation rate to remain high, firm warns

There is no end in sight to rising commodity prices as Blantyre-based investment advisory firm, Nico Asset Managers Limited, has forecast that the inflation rate will remain high, triggered by soaring high cost of food and low maize output.

In its June 2015 monthly economic report, Nico Asset Managers said: “Inflation is expected to remain elevated, as a result of the rising food prices from lower than expected harvest and recovering global oil prices.”

Hoping for single digit rate: Gondwe
Hoping for single digit rate: Gondwe

Malawi’s headline inflation rate—the rate at which the general level of prices for goods and services rises—now stands at 19.5 percent as at May 2015, a 0.7 percentage points increase from 18.8 percent in April 2015, according to National Statistical Office (NSO).

As such, the projected high inflation rate by Nico Asset Managers should be no sweet news for Malawians as that would further shrink their disposable income for spending and investments, thereby eroding their purchasing power in the process.

Annual average inflation for the year 2014 was at 23.7 percent, down from 27.3 percent in 2013 while the end of period inflation was at 24.2 percent, up from 23.5 percent in December 2013.

During the Malawi Investment Forum held recently in Lilongwe, Minister of Finance, Economic Planning and Development Goodall Gondwe said government seeks to achieve single-digit inflation rate in two to three years time.

 

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