The inflation rate has hit an 11-year record high after surging to 34.5 percent in December 2023, according to figures from the National Statistical Office (NSO). This is an increase of 1.4 percentage points from the 33.1 percent recorded in November 2023. The last time the rate reached a similar record was in December 2012, during Joyce Banda’s era, when it reached 34.6 percent.
The increase has been attributed to increases in both food and non-food inflation, at 43.5 percent and 22.8 percent, respectively. Figures from NSO further indicate that the national month-to-month inflation rate for December 2023 stands at 3.6 percent, with the food inflation rate at 4.7 percent and non-food inflation rate at 2.1 percent. “The urban month-to-month inflation rate is at 4.2 percent.
Urban food and non-food inflation rates stand at 4.9 percent and 3.3 percent, respectively. “The rural month-to-month inflation rate is at 3.4 percent. Rural food and non-food inflation rates stand at 4.6 percent and 1.3 percent, respectively,” communication from NSO reads.
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Meanwhile, the annual year-on-year inflation rate for 2023 stands at 28.8 percent, compared to 21.0 percent recorded in 2022. Annual food and non-food inflation rates are at 37.1 percent and 18.8 percent, respectively. In November 2023, the Reserve Bank of Malawi announced a 44 percent devaluation of the Kwacha.
Following the devaluation, prices of both basic and luxury goods increased by different margins, a trend that persisted in December. The country is also in the lean period, where people are yet to start harvesting— which negatively impacts food prices. Speaking during pre-budget consultation meetings, Finance and Economic Affairs Minister Simplex Chithyola Banda said government has set out the macroeconomic framework for the 2024-25 budget. He indicated that the macroeconomic targets include fiscal and monetary policy measures as well as debt sustainability targets to be achieved by the end of the fiscal year.
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