Analysts are describing the past six months as distressing to consumers after commodity prices continued soaring past harvesting period.
This is the broad view of economists and consumer activists who lamented rising inflation during first half of the year that ended on 30 June year.
During the period, inflation reached a ten-year record of 29.2percent and forex scarcity persisted resulting in the local currency weakening by 2percent.
Executive Director of Consumes Association of Malawi –CAMA John Kapito lamented that: “Inflation has risen sharply, the figures that are very harsh to consumers and whole economy.
“We have also seen that the cost of living has sharply gone up because of the weakening of the kwacha, not only for the imports but also for water and other products and these have impacted badly to consumers and the whole economy.”
Apart from Russia-Ukrain conflict induced global supply chain disruptions, cyclone Freddy affected productivity sweeping away hectares of crops and reduce produce output.
In its second monetary policy report, the Reserve Bank of Malawi said projections show that inflation will remain elevated this year when it revised upwards policy rate to 22percent.
“The MPC noted that inflation is set to remain elevated in 2023, as the risks which emerged during the review quarter fuelled both adverse supply-side and heightened demand-side inflationary pressures.
“The Committee observed that such a high inflationary environment is not conducive for economic growth,” the statement reads.
Meanwhile, authorities revised down the 2023 economic growth estimate from 2.7percent to 1.9percent after assessing the cyclone impact.