SILUMBU—There is a need to arrest inflation
Experts have tipped Capital Hill to enhance fiscal discipline and work on modalities towards taming the rising cost of living in the country in a bid to hasten economic recovery.
This comes after the Malawi Energy Regulatory Authority (Mera) on Sunday announced a 22.8 percent increase in fuel prices, which commentators fear could lead to a surge in prices of other commodities on the market.
Speaking in an interview on Sunday Times Talk programme on Times Radio, University of Malawi-based economist Exley Silumbu said Malawians should expect the adjustments to have an impact on the cost of living.
He said current changes in prices of petroleum products are occurring under the influence of the Covid pandemic.
“There is a need to arrest inflation. That will mean restricting demand and production and so forth; so, I think the authorities are just watching how the ball will be played here but, all in all, they should relook at the country’s economic policy,” Silumbu said.
Economics Association of Malawi (Ecama) Executive Director Frank Chikuta said in an interview that the development would surely push inflation upwards, thereby eroding the people’s purchasing power.
“In the medium term, the development will have dire consequences on poverty levels in the country. The short term solution is to tighten monetary policy, the tools that are used for tightening monetary policy such as the policy rate and the liquidity reserve requirement. So, one would expect that, during the next meeting of the Monetary Policy Committee, they tighten the stance to make sure that inflation is contained,” Chikuta said.
Mera spokesperson Fitina Khonje said it is not certain as to whether global fuel prices will decline in the short to medium term, which will determine developments on the local market.
She said currently Mera has resolved to effect any changes on fuel prices as they happen
Scores of Malawians that participated in the programme lamented the development, saying life will be hard as prices of most goods and services will also increase.