Malawi’s headline inflation closed 2024 on an upward trajectory, rising by 1.1 percentage points to reach 28.1 percent in December, driven by rising food prices, according to figures from the National Statistical Office (NSO) released Thursday.
However, Reserve Bank of Malawi (RBM) Governor Macdonald Mafuta Mwale is optimistic that inflation will gradually decline, although the path to price stability will be uneven.
According to the NSO, food inflation rose from 33.7 percent in November to 35.6 percent in December.
Non-food prices, while still increasing, recorded a slight decline in the rate of increase, from 17.2 percent to 16.8 percent over the same period.
“High food prices is the major driver of inflation in Malawi. Prices of food items such as maize and its products, rice, bread, fish, cooking oil, and vegetables increased in the month of December 2024 resulting in an increase in the food index.
“The food prices rose at a faster rate compared to December 2023, resulting in an increase in the Food Year-on-Year inflation rate,” NSO says.
It adds that the Non-Food Index remained elevated in December 2024 due to price increases in items such as clothing and footwear, furnishings, household equipment and routine maintenance of the house, as well as in the restaurants and hotels and housing, water and electricity categories.
“The increase in the Non-Food index is less compared to the same period in 2023, resulting in a decline in the Non-Food Year-on-Year inflation rate,” NSO says.
In an exclusive interview on Wednesday, Mafuta Mwale expressed his determination to address supply-side constraints so that the central bank can accelerate the disinflation process.
“That is why I will work with everyone in the policy and production value chains. We have already started working closely with banks to diversify their lending to selected high-growth sectors.
“This will ensure that banks play a vital and rightful role in financial intermediation, thereby contributing to a more stable economic environment,” the RBM chief said.
The annual average year-on-year inflation rate for 2024 stands at 32.2 percent, compared to 28.8 percent recorded in 2023.
RBM has a medium-term objective of achieving an inflation rate of 5.0 percent.
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