Malawi’s year-on-year headline inflation rate has for the first time in many months registered a drop, marginally decelerating to 36.5 percent, which represents a 1.5 percentage points ease than the February headline inflation rate, the National Statistical Office (NSO) has said.
NSO has since attributed the ease on mounting pressure on inflation rate during the month to the improved availability of food, especially cereals—especially availability of maize— as it dictates the movement in the Consumer Price Index (CPI), the basket employed by the statistical body to compute inflation figures.
“Food inflation has started to decline, owing mainly to the availability of cereals in some parts of the country,” said NSO in its inflation update on its website at the weekend.
Malawi is this year expected to realise a maize surplus of about 740 000 metric tons, which if achieved would represent a 50 percent rise from last year’s surplus.
The decrease in the average price comes barely two weeks after the Reserve Bank of Malawi (RBM) Governor Charles Chuka told Nation Online in an exclusive interview in the capital, Lilongwe, that the central bank expects the rate of inflation to start plummeting backed by increased availability of maize across the country as well as the relative stability of the local currency, the kwacha.
The recent dramatic fall of the kwacha to other major currencies since the currency was floated in May last year has continued to fuel imported inflation as importers pass on higher costs of importing goods and services to domestic consumers.
“Non-food inflation has gone up due to the upward adjustment in the price of gasoline and its derivatives,” said NSO.
But NSO said, however, the impact on overall inflation has largely been offset by the decline in food inflation.
In January this year, NSO rebased the consumer price indices (CPI) to 2012 using updated household expenditure patterns derived from the 2010/2011 Integrated Household Survey (IHS3)
The rebasing has seen changes in the contributions of different components in the consumer price index and introduction of other minor components.
Following the rebasing, NSO has changed the weighting of the consumption basket in such a way that food contribution has decreased to 50.2 percent from 58.1 percent.
Chuka pleaded with Malawians in an interview with Business News that there is no need to panic, saying there were strong indications that the economy would begin to stabilise.
“We are seeing inflation coming down after April. We need to realise that there is hope at the end of our work. Do not panic,” said Chuka.
But bothered by several risks in the financial system, Chuka announced an upward revision of annual average inflation rate for Malawi by two percentage points to 20 percent come 31st December 2013.