Malawi has for the past 10 months managed to stay below the Comesa inflation rate, a situation economic analysts say improves the country’s business environment.
The Common Market for Eastern and Southern Africa (Comesa) Harmonised Consumer Price Index (HCPI) released on Sunday shows that Malawi’s inflation rate has eased from 21.7 percent in January to 9.3 percent in August 2017.
According to National Statistical Office (NSO), Malawi’s inflation as measured by the Consumer Price Index (CPI) hit single digit of 9.3 percent in August, the first time in more than six years.
HCPI index shows that year-on-year, inflation rate (annual percentage change) in the region stood at 27 percent for the month of August 2017, down from 27.5 percent in July 2017. Last year, the inflation rate was at 14.3 percent.
Despite the positive trajectory, Malawi’s inflation rate in August 2017 remained the fourth most highest in the region after DRCs 43.5 percent, Sudan’s 33.4 percent and Egypt’s 32.8 percent.
Analysts have urged monetary and fiscal authorities to consolidate the achievements made towards attaining macroeconomic stability, including the easing of inflation by sealing all fiscal policy loopholes and monetary policy potential slippages.
The country’s annual rate of inflation has been falling steadily since June 2016 helped by declining food prices, particularly maize a relatively stable kwacha and lower international fuel prices.
In its third Monetary Policy Committee (MPC) meeting, Reserve Bank of Malawi (RBM) maintained the policy rate at 18 percent which the central bank said will help to consolidate the gains achieved so far in reducing inflation rate to ensure that it remains in single digit for a longer period to guarantee sustainably low interest rates, thereby enhancing private sector investment and economic growth over a long-term horizon.