Source: NSO
Malawi’s headline inflation rate is down 190 basis points(bps) to 32.4% as of October 2024 from 34.3% in September 2024. The decline was primarily driven by a drop in food inflation from 43.5% to 40.3% and non food inflation from 21.8% to 21.2%. Although this development offers a glimmer of hope amidst persistent economic challenges, staple food maize prices increased by 4% during the same period. Maize accounts for over 50% of Malawi’s food inflation basket, therefore the price increase offsets the potential benefits from the drop in inflation.
- October’s decline marks the first decline time this year since March 2024, though the annual rate remains elevated
- The overall CPI increased from 196.6 in September to 200.3 in October, showing that prices of goods and services continue to rise at a faster rate.
- The average retail price of maize increased from K790/kg to K819/kg
Looking ahead to November, adjustments in the inflation basket are expected to reflect changes in increased food prices due to early shortages in urban markets.
“The current inflation figures do not give a true picture of what is happening economically.” said Cama executive director John Kapito in an Interview with the Nation.
However, at the recent Monetary Policy Committee (MPC) meeting held on the 4th of November, the Reserve Bank of Malawi opted to maintain the policy rate at 26.0%, emphasizing the need to control inflation expectations. The decision reflects the central bank’s cautious approach to balancing price stability with supporting economic growth.
