Malawi inflation rate highest among sampled countries
Malawi’s inflation—a monster that eats into the majority of people’s disposable income—is the highest among the four sampled neighbouring countries, signalling that prices of goods and services in the country are increasing at a faster rate.
A sampling by Business News based on figures from the Economist Intelligence Unit (EIU) show that the country’s inflation rate, currently at 23.9 percent as of April as per National Statistical Office (NSO) data, is the highest beating by far Zambia, Mozambique, Tanzania and Uganda.
Malawi’s year-on-year inflation has been on the downward spiral since February this year largely due to the availability of food particularly maize which accounts for 52.1 percent in the consumer price index (CPI)—a measure of price level of a market basket of consumer goods and services purchased by households and the continued appreciation of the kwacha.
In April, inflation eased by one percentage points from the month before buoyed by food inflation which dropped year-on-year to 19.5 percent from 30.7 percent.
The sampling show that Zambia’s year-on year inflation increased to 7.8 percent in April 2014 from 7.7 percent in March 2014 said the EIU quoting the Bank of Zambia.
It said inflation is forecast to average 7.2 percent in 2014 due to the removal of maize and fuel subsidies in 2013.
“The EIU forecast economic growth at seven percent in 2014 due to increases of copper production and wage increases for civil servants that are expected to boost consumer spending and investment. The Zambian kwacha depreciated against all the major currencies,” said EIU.
On Mozambique, the economic think-tank indicates that the country’s inflation increase to three percent from 2.3 percent the month before due to increased food and non-alcoholic beverages cost.
It said economic growth is expected to increase to 7.3 percent in 2014 from 6.5 percent in 2013 before accelerating to 7.8 percent between 2016 and 2018.
The Mozambique metical depreciated against all the major currencies and eased by 1.02 percent against the dollar to MZN 30.64.
The northern neighbour Tanzania had its inflation increased to 6.1 percent in April 2014 from six percent in March 2014 with economic growth is forecast to average 8.2 percent in 2014, driven by investments in the gas sector and pre-election spending.
“Tanzania will have an expansionary fiscal policy in the lead up to elections in October 2015. The Tanzanian shilling depreciated against all the major currencies,” said the EIU.
Uganda’s inflation, according to the EIU, decreased to 6.7 percent in April 2014 from 7.1 percent in March 2014 and the think-tank forecasts the country’s economic growth at seven percent in 2014, following stagnated public spending and weak external demand.
The Reserve Bank of Malawi (RBM) has projected that Malawi inflation will fall to around 16 percent in December this year.
But the IMF has maintained country’s 2014 single digit inflation target of 9.7 percent, according to the April 2014 World Economic Outlook (WEO), which economists doubted in unattainable.
