Malawi’s year-on-year headline inflation inched up by 0.8 percentage points to 26.7 percent in October, largely due to the rise in food and non-food prices, National Statistical Office (NSO) data shows.
During the month under review, food inflation rate rose to 34.5 percent while the non-food inflation rate closed at 18.6 percent.
Consumers are digging deeper into their pockets to survive
This means prices of food items as well as non-food items increased at a higher rate in October compared to September when food prices rose to 33.87 percent while non-food prices rose to 18.3 percent.
Reacting to the development, Consumers Association of Malawi (Cama) executive director John Kapito said the rise in the inflation rate is being felt by consumers as the cost of living continues to rise.
He said: “Many Malawians are currently experiencing challenges to access the very basic needs that a year ago were affordable. The rising inflation has also affected the lack of access to disposable incomes.
“All of a sudden, things have fallen apart as almost everything has gone up with no cushioning mechanisms for the ordinary consumer.
“The current economic situation is not sustainable and there is a need for market interventions by government because people are tired and hurt.”
Meanwhile, the Reserve Bank of Malawi (RBM) has indicated that inflation outlook remains under pressure.
In its September Market Intelligence Report, the central bank indicated that inflation would remain high and in the process push it to tighten the policy stance.
Reads the report in part: “Inflation will keep rising as the supply-demand imbalances are yet to normalise. With prices expected to remain high in the near-term, further monetary policy tightening should be expected.”
During the fourth Monetary Policy Committee meeting last month, RBM Governor Wilson Banda also hinted that in the period ahead, pressures on inflation are likely to continue, mainly arising from a seasonal increase in prices of domestically produced food items and imported items.
Economic statistician Alick Nyasulu has since observed that rising inflation is a cause for concern and a situation which calls for a reflection on policy issues.
He said: “As is often the case, this tends to force central banks all over the world to increase interest rates. The monetary policy committee may indeed decide to increase the policy rate which under such instances tends to go up to tame the rising inflation.” In the 2022/23 National Budget Statement, Minister of Finance and Economic Affairs Sosten Gwengwe indicated that inflation would average 9.1 percent in the 2022/23 financial year.