Urban cost of living down 1.5%

The cost of living in Malawi’s four cities of Lilongwe, Zomba, Blantyre and Mzuzu in February 2014, dropped 1.5 percent to an average of K117 000, largely propelled by a fall in maize prices.

The Centre for Social Concern (CfSC) Basic Needs Basket (BNB) for February 2014 indicates that the price of maize, which is a staple to many Malawians, dropped by about 20 percent to average K6 000 per 50 kilogramme bag compared to the previous month.

CfSC data released last week shows that a household of six in capital city, Lilongwe required about K123 500, Zomba K110 000, Blantyre K128 000 and Mzuzu about K105 000 to meet basic food and non food items.

The BNB items include maize, milling, beans, charcoal, housing and electricity but excluding education and transport.

The food basket, which is a component of the BNB—a threshold for ultra poverty according to the centre—also dropped although marginally along with maize prices to about K70 000 in the month.

The data, which is provided by the CfSC, a Lilongwe faith-based organisation however indicates   that the non-food basket marginally rose to an average K46 000.

However in January, the BNB jumped by about 7.5 percent to an average K118 218 per month, according to report,  with a household of six in Lilongwe requiring K126 925, Zomba K114 213, Blantyre K128 761 and Mzuzu K102 974 in the month.

Generally, experts expect a drop in food prices due to the forthcoming harvest which is also anticipated to drive down inflation.

The kwacha has also been appreciating against major trading currencies, giving hope to a further decline in the cost of living and inflation.

The National Statistical Office (NSO) has put the year-on-year headline inflation for February at 24.6 percent, a decrease from 25.9 percent in January 2014, pushed down by the availability of food.

According to NSO, in February food inflation decreased to 20.4 percent from 24.1 percent but non-food inflation increased to 29.3 percent from 27.7 percent.

The food and non-alcoholic drinks basket comprise about 50.2 percent of Malawi’s inflation basket.

During the month, urban inflation rate decreased to 34.4 percent from 37.2 percent, rural inflation decreased to 20 percent from 24.4 percent.

But in January, according to the NSO, inflation rose to 25.9 percent from 23.5 percent in December, due to rising food prices coupled with the rapid depreciation of the kwacha.