Malawi’s year-on-year headline inflation rate has continued to decline with the April rate down by 1.2 percentage points to 14.6 percent from 15.8 percent the previous month.
The recent drop in inflation is a reflection of the decrease in the price of maize which, as part of the food component, has a huge weight in the consumer price index (CPI) at 50.1 percent. CPI is a basket of commodities that measures the price level of consumer goods and services purchased by households.
A statement issued by the National Statistical Office (NSO) on Thursday shows that the drop in inflation is largely on account of the decrease in food inflation which has eased to 14.7 percent from 17.0 percent.
On the other hand non-food inflation slighlty dropped to 14.4 percent in April from 14.5 percentattained the previous month.
During the same period last year, headline inflation stood at 20.9 percent. This means that prices are softer this year than during the same period last year.
“The urban and rural rates stand at 12.5 percent and 16.2, percent respectively,” reads the NSO statement.
The development means that prices are softer in urban than rural areas.
So far, maize prices have continued to drop with a 50 kilogrammes (kg) bag now selling as at low as K3 500 in some areas.
In an interview with Business News on Friday, Catholic University head of economics department Gilbert Kachamba said while it is expected that the consumers’ buying power will increase, the challenge is that it is very hard most of the times for people to feel the change in inflation when it is decreasing as compared to when it is increasing
“In theory, it is expected that the consumers’ buying power will increase as most of the consumption for Malawians is on food. But the challenge is on the notion that it is very hard most of the times for people to feel the change in inflation when it is decreasing as compared to when it is increasing,” he said.
In an earlier interview, Malawi Economic Justice Network (Mejn) executive director Dalitso Kubalasa 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