June inflation rate down to 11.3%—NSO

Reduced food prices have continued to push down inflation, with the rate for June 2017 recorded at 11.3 percent from the previous month’s 12.3 percent, according to the National Statistical Office (NSO).

However, the June rate is 0.6 percentage points above the Reserve Bank of Malawi (RBM) June 2017 inflation projection of 10.7 percent.

But RBM spokesperson MbaneNgwira yesterday said the forecast is within the five percent margin of error, the central bank is statistically within projection.

NSO figures show that food inflation declined by 1.9 percentage points to 9.3 percent from 11.2 percent in May 2017.

On the other hand, non-food inflation slightly declined by 0.3 percentage points to 13.2 percent from 13.5 percent in May 2017.

Maize, as part of the food component, has a huge weight of 50.1 percent in the consumer price index (CPI), which is a basket of commodities that measures the price level of consumer goods and services purchased by households.

In the recent months, maize prices crashed to around as low as K50 per kilogramme (kg) or K2 500 per 50kg bag.

However, for the past few weeks, prices have slightly picked largely induced by buying price of the grain at Agricultural Development and Marketing Corporation (Admarc) pegged at K170 per kg.

The country’s annual rate of inflation has been falling steadily for more than 10 months since June 2016.

This scenario compelled the RBM to reduce further the policy rate from 22 percent to 18 percent, a development which has triggered a drop in bank interest rates from around 31 percent to around 27.5 percent.

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