Reserve Bank of Malawi sees inflation pressure easing

The Reserve Bank of Malawi (RBM) has said it sees the country’s inflation starting to come down in the next few months.

In an interview on Friday, RBM Deputy Governor responsible for economics Macdonald Mafuta Mwale said the central bank has a lot to do with inflation and that officials at the bank are leaving no stone unturned to ensure that it starts falling again.

Mafuta Mwale said RBM, in conjunction with the Ministry of Finance and Ministry of Agriculture, is putting a coordinated action plan to contain inflationary pressures.

“Yes the country has been experiencing Inflationary pressures but we are seeing signs of easing down as evidenced by the declining month-to-month inflation.

Significant pressure is coming from food prices but we are quite aware that the government and donors have accumulated enough food stuffs including maize such that once distribution picks speed, coupled with RBM tight monetary policy, inflation will start decelerating,” Mafuta Mwale said.

According to Mafuta Mwale, maintaining a tight monetary policy and conducting open market operations has helped to reduce spillover effects from rising food prices to the nonfood inflation, which has remained around 22 percent.

“Our projections, taking into consideration all these events, are that inflation will start going down in the next few months,” Mafuta Mwale said.

Malawi’s headline inflation went up in September to 34.3 percent from 33.9 percent in August.

The September increase is attributed to a rise in food inflation, which rose to 43.5 percent in September from 42 percent in August, while non-food inflation saw a slight decrease from 22.7 percent to 21.8 percent.

In urban areas, the overall month-to-month inflation rate was at 1.4 percent, with food and non-food inflation rates at 1.7 percent and 1.1 percent, respectively.

Rural areas experienced a 2.1 percent month-to-month inflation rate in the month under review, with food inflation at 2.9 percent and non-food inflation at 0.7 percent.

Economic Association of Malawi President Bertha Chikadza last week said the rise in inflation reflects ongoing pressures within the economy.