Business News

November inflation eases to 19.9 percent

 

For four months in a row, Malawi’s year-on-year headline inflation rate has continued to decline with the November rate down to 19.9 percent on account of a drop in food prices.

Inflation rate fell 0.2 percentage points from last month’s 20.1 percent courtesy of declining food inflation, now at 24.8 percent from 25.4 percent, according to the National Statistical Office (NSO).

Prices of goods have continued to ease for the past four months

The NSO report shows that non-food inflation remained unchanged at 15.2 percent.

During the same period last year, inflation rate stood at 24.6 percent.

Inflation rate is now 2.3 percentage points higher than the Reserve Bank of Malawi (RBM) December 2016 inflation projection of 22.2 percent.

RBM Governor Charles Chuka told journalists last month that consistent implementation of a tight monetary policy stance and actions taken by government to reduce fiscal pressures, including from Farm Input Subsidy Programme (Fisp) operations and from Agricultural Development and Marketing Corporation (Admarc) maize operations, have combined to reduce inflationary expectations.

He said: “On balance, the exchange rate outlook is far much better than last year, implying a much less inflationary impact from the exchange rate. While utility rates might go up, the increase might be relatively less.

“Thus, year-on-year, inflation will generally continue to slowdown.”

In an interview yesterday, Ben Kaluwa, an economics professor at the University of Malawi’s Chancellor College, described the easing inflation as “artificial since we are relying on imported maize to ease the maize deficit”.

RBM has projected year-end inflation at 22.2 percent, but will edge up slightly to 22.7 percent in February 2017 before decelerating to 18.6 percent in June 2017.

International Monetary Fund (IMF) has called on the need to bring down inflation if Malawi’s economy is to get back on track. n

 

Related Articles

Back to top button