Inflation picks up Pace and increases to 9.3%, Interest Rates remain at 16%
Malawi’s headline inflation quickened by 0.3% in August to 9.3% as escalating food prices continued to bite, the National Statistical Office (NSO) has said. This was the second month inflation has surged after making a u-turn in July. The continued rise in inflation comes at a time Malawians are expecting another significant jump in electricity tariffs with the Malawi Energy Regulatory Authority (Mera) board of directors meeting this week to give a go ahead to the Electricity Supply Corporation of Malawi (Escom) to raise prices by 53% this year.
Malawians have in recent months struggled with surging food prices and transport costs. In addition, energy prices have jumped, following a 7% electricity price hike by Escom. NSO said food inflation inched up from 9.5% in July to percent in 10.1%. Nonfood inflation was recorded at 8.7%.
“The national month to month inflation rate for August 2018 stands at 1.4 percent compared to 0.6 percent in July 2018. Food inflation rate is at 2.6 percent compared to 1.0 percent recorded in July 2018 while nonfood inflation rate is 0.5 percent compared to 0.4 percent in July 2018,” reads the NSO statement in part. Dean of Social Sciences at the Catholic University, Gilbert Kachamba, recently warned that inflation would go up in the months to come as prices of basic commodities, including maize, rise. He said the recent hike in fuel prices as well as electricity and water tariffs could equally quicken inflation further.
But Reserve Bank of Malawi Governor, Dalitso Kabambe, recently, said threats to inflation going forward remain manageable. He said the central bank does not expect fuel prices to continue rising both on the local and international market. In their last session, the Reserve Bank left the Interest rates unchanged at 16%.