Malawi inflation rate to ease in Q1, disaster threatens food prices
Nico Asset Managers Limited has forecast that Malawi’s inflation rate is expected to begin easing to low levels in the first quarter (Q1) of this year on account of low fuel prices and expected seasonal appreciation of the kwacha.
The Blantyre-based investment advisory firm, quoting the Economist Intelligence Unit (EIU), said inflation rate will likely average 17.5 percent in 2015, before moderating to an average of 9.4 percent in the period between 2016 and 2019 as productivity increases and rising fuel prices are offset by easing food prices.
Currently, Malawi’s year-on-year inflation rate stands at 23.7 percent as of November 2014, according to National Statistical Office (NSO).
The projected ease in the rate of inflation in Q1 of this year would be a relief to consumers who are currently hard hit by souring commodity prices as their purchasing power would be relatively higher, allowing their disposable income to buy more goods and services than was the case when inflation was high.
“Government expects inflation to decline to 15.6 percent in 2015 due to prudent monetary policies and increases in agricultural production. However, the late rains and the damage to crops due to excessive rains could have a negative impact on agricultural output, which would add pressures to food inflation,” said the firm in its 2014 annual economic report.
