Rising maize prices have pushed up March 2019 inflation rate by 1.4 percentage points to 9.3 percent from the 7.9 percent the previous month, NSO figures show.
Reserve Bank of Malawi (RBM) spokesperson Mbane Ngwira yesterday attributed the rise to seasonal trends in the price of the staple grain.
National Statistical Office (NSO) figures show that although food inflation registered mounting pressures in the review month, gains were mainly attributed to non-food inflation which fell by 0.4 percentage points to a 28-year low of five percent. Non-food inflation was at this level in 1991.
Food inflation, on the other hand, rose by 3.6 percentage points to 14.4 percent compared to 10.8 percent in February 2019.
During the period, maize prices rose by more than 60 percent from an average of K109.25 per kilogramme (kg) mostly in some parts of the Southern Region which were hit by floods in early March.
In an interview, Ngwira said prospects for the first half of 2019 point to further declines in inflation on account of expected developments in both food and non-food prices following seasonal trends when food prices start going down at the onset of the 2018/19 harvest season.
He, however, said the significance of the drop in non-food inflation is a clear manifestation of the effectiveness of monetary policy which is premised on the fact that maize prices are administered while the other products are determined on the market.
“Therefore, Malawians have been benefiting from low increases in prices for all other products except maize. For instance, the stability in fuel prices has meant that the ripple effects of increases in fuel prices have been curtailed,” he said.
On his part, Consumers Association of Malawi (Cama) executive director John Kapito said the rise in food inflation has not been as dramatic as was expected largely due to the projected bumper harvest which forced traders to offload their maize on the market.
Economics Association of Malawi (Ecama) executive director Maleka Thula said the lower inflation outturn for February 2019 should be able to offset the rise in the current month and going forward.
Ministry of Agriculture, Irrigation and Water Development second round crop estimates showed that the floods did not have huge bearing on maize output, with the country expected to have a surplus of 355 000 metric tonnes (MT).
Maize, as part of the food component, impacts the country’s economy given that it constitutes 45.2 percent in the Consumer Price Index (CPI), which is an aggregate basket of goods and services for computing inflation. n