Rising food, transport prices push inflation to 9.1%

Malawi’s year-on-year headline inflation inched up by 0.2 percentage points to 9.1 percent in June from 8.9 percent as food prices continued to rise.

Published figures from National Statistical Office (NSO) on Wednesday show that food inflation rose to 11.1 percent while non-food inflation rose to 7.2 percent.

This means prices of food items as well prices of non-food items increased at a higher rate in June compared to May.

All this is happening at a time when the country is harvesting food crops and storing maize—the staple grain that contributes 50.2 percent to national inflation, the rate of increase in prices over a given period of time.

Generally at this time of the year, prices of food should be moderating.

Already, the weakening of the kwacha against world currencies has added to the woes consumers have to go through as imported goods cost more.

As of yesterday, the kwacha was trading at K818 against the dollar.

The impact of the weak kwacha is being felt at the fuel pump where fuel—which is used to move goods and food around—has gone up twice since December 2020.

The most recent hike in April saw petrol price increase from K834.60 to K899.20 representing 7.74 percent, while diesel moved from K826.40 to K898.00 representing 8.66 percent.

Data from the Centre for Social Concern (CfSC) show that the accelerating inflation [from 7.6 percent in January to 9.1 percent this month] has pushed the cost of living up in the country’s major cities.

In an interview, CfSC programme officer for economic governance Bernard Mphepo said the total cost of living is increasing due to price escalation, especially of essential food items.

He said: “Dwindling of incomes for households due to impact of Covid-19 pandemic has also contributed to the rise in cost of living.”

Consumers Association of Malawi (Cama) executive director John Kapito said consumers are feeling the pinch of price hikes.

He said: “The current situation is hard economically and socially as we do not know where this inflation trend will lead to.”

The Reserve Bank of Malawi custodians of the monetary policy, projected that headline inflation would average 8.4 percent in 2021, up from 7.6 percent projected during the second Monetary Policy Committee meeting.