January inflation rate climbs to 12.1%—NSO

Malawi’s year-on-year headline inflation for January 2022 inched up by 0.6 percentage points to 12.1 percent from 11.5 percent in December 2021 due to rising prices of food and non-food items.

Published figures from National Statistical Office (NSO) yesterday show that in January, national food inflation rate rose to 14.2 percent while non-food inflation rate rose to 9.6 percent.

This means prices of goods and services increased at a higher rate in January compared to December last year.

Consumers Association of Malawi executive director John Kapito said in an interview yesterday that the rise in inflation is felt by consumers as the cost of living has continued to rise.

He said: “Many Malawians are currently experiencing challenges to access the very basic needs that were affordable a year ago.  The rising inflation has also been affected by the lack of access to disposable incomes.

“All of a sudden, things have fallen apart as almost everything has gone up with no cushioning mechanisms for the ordinary consumer. The current economic situation is unsustainable and there is need for market interventions by government because people are tired and hurt.”

In Malawi, as part of the food component, maize accounts for about 45.2 percent of the consumer price index, which is an aggregate basket of goods and services for computing inflation.

Meanwhile, Reserve Bank of Malawi (RBM) has indicated that although inflation pressures are mounting, the situation is transitory and likely to dissipate after the lean period.

At the first Monetary Policy Committee (MPC) meeting, RBM Governor Wilson Banda noted that though inflation moved into double digits in the fourth quarter of 2021 averaging 10.8 percent against a projection of 10 percent, the annual average  headline inflation remained in single-digit in 2021 at 9.3 percent, marginally higher than the projection of 9.1 percent.

He admitted that in the period ahead, pressures on inflation are likely to continue mainly arising from a seasonal increase in prices of domestically produced food items and imported inflation.

In his National Budget Statement, Minister of Finance and Economic Affairs Sosten Gwengwe indicated that inflation rate would average 9.1 percent in the 2022/23 financial year.