October inflation drops to 7.7%, to spur growth
The Reserve Bank of Malawi (RBM) and some economic commentators say the continued drop in inflation rate is an indication that the country’s economy is on the right path.
On Friday, National Statistical Office (NSO) published figures which show that Malawi’s year-on-year inflation rate for October 2017 dropped further to 7.7 percent from the previous month’s 8.3 percent.
During the same period last year, inflation rate stood at 19.9 percent and has been declining for the past year or so largely due to easing food prices, particularly maize.
In an interview on Saturday, CDH Investment Bank chief executive officer Misheck Esau said the continued drop in inflation is good news.
“Inflation coming down to 7.7 percent is great news and a major milestone for the economy. I salute all those who handled the hunger crisis when we had a drought. The timely interventions produced results that we all are about to enjoy now,” he said.
Esau said the drop in inflation could trigger further interest rate cuts going forward.
Catholic University of Malawi economics lecturer Hopkins Kabaghe said the trend inflation has taken is good for consumers.
“We prefer single digit inflation because it means that generally prices are rising at a slow rate,” he said.
RBM spokesperson Mbane Ngwira said the attainment of single digit inflation will spur savings as people gain confidence in the market knowing that its value will not be eroded by rising inflation.
