Malawi’s soaring inflation biting hard

The continued rise in inflation in Malawi is having a knock-on effect on the cost of living for most people, the Centre for Social Concern (CfSC) has said.

CfSC’s social conditions research programme officer Alex Nkosi said in the report covering January to May 2012 that the cost of living for low income earning families has increased by 35 percent in the urban areas although it rose steadily from January 2011 to March 2012.

In April 2012, the average cost of living went down by 3.5 percent because most food items were in season, leading to high supply on the market reduced cost of living.

“In January 2011, the average CLI [Cost of Living Index] in the urban areas of Mzuzu, Lilongwe, Zomba and Blantyre for a low income earning family of six was K47 334 (about $190). Currently the cost of living for the same household of six members stands at K72 506 (about $290), representing a 35 percent increase,” said Nkosi.

He said as expected, the 49 percent devaluation of the kwacha has further increased the CLI by four percent at a time when most food items are in season and supply is high.

Nkosi argued that the impact of devaluation has also been felt by high income earners because most of them buy imported goods in chain stores.

CfSC, however, said the CLI may increase drastically in the coming months when most food items go out of season, arguing that the four percent increase does not necessarily match up to the 49 percent devaluation.