RBM Deputy Governor optimistic as inflation shows signs of easing
In a recent interview, Reserve Bank of Malawi (RBM) Deputy Governor McDonald Mafuta Mwale expressed optimism about the country’s inflation rate, currently at 34.3 percent, indicating that it may soon begin to decline.
Mafuta Mwale highlighted the central bank’s observations of easing pressures on prices, particularly within the non-food sector, which has seen inflation decrease to 21.8 percent, according to data from the National Statistical Office.
Mafuta Mwale attributed the ongoing inflationary challenges primarily to rising food prices. However, he noted that the government and donors have stockpiled sufficient foodstuffs, including maize, which could mitigate future price increases. “Once the distribution of these food items accelerates, combined with the RBM’s tight monetary policy, we expect to see inflation starting to decelerate,” he stated.
The RBM has coordinated efforts with the Ministry of Finance and Economic Affairs and the Ministry of Agriculture to tackle inflation head-on. “We recognize that inflation is a significant concern, impacting people’s disposable incomes,” Mafuta Mwale remarked, underscoring the urgency of the situation.
Maintaining a tight monetary policy has been a crucial strategy for the RBM in curbing the spillover effects of rising food prices into the non-food sector. The bank is also vigilant about potential external shocks, particularly from geopolitical conflicts in the Middle East, which could further complicate the domestic economic landscape. “We are carefully monitoring these developments to proactively cushion the economy against additional inflationary pressures,” explained Mafuta Mwale.
Economics Association of Malawi acting president Bertha Bangara Chikadza emphasized the need for a unified approach between monetary and fiscal authorities. She pointed out that imported inflation, largely driven by currency depreciation, necessitates coordinated efforts to boost domestic production.
Mzuzu University economics lecturer Christopher Mbukwa added that addressing supply-side constraints is essential for effective inflation management. “Alongside monetary policy, we need to ensure that the supply chain is functioning optimally to support economic stability,” he advised.
In its latest Monetary Policy report, the RBM projected annual inflation to reach 33.5 percent this year, a rise from 28.8 percent in the previous year. Despite the challenges ahead, Mafuta Mwale’s comments reflect a cautious optimism that with concerted efforts and timely interventions, inflation in Malawi can be managed effectively, providing relief to consumers and stabilizing the economy
