Malawi runaway inflation hits 28 percent, a 7-year high
Malawi's headline inflation rose to a seven-year high in September when it jumped from 25.5 percent in August to 28.3 percent.
The National Statistical Office (NSO) said in its September 2012 Stats Flash released yesterday that core inflation, has gone up by 28.8 percent compared to 12.5 percent during the same period last year.
The last time Malawi inflation was seen above 28.8 percent was in 2005 following a dry spell that hit the country, resulting in crop failure.
According to NSO, the urban inflation rate moved up from 28.2 percent to 31.1 percent while the rural inflation soared from 23.3 percent in August to 26.6 percent.
"Food inflation has gone up by 27.7 percent compared to 2.7 percent during the same period last year," says NSO.
Finance Minister Ken Lipenga predicted inflation to average 18.4 percent in 2012 from an average of 7.6 percent in 2012 with the prospects of decelerating to 16.1 percent in 2013 as full recovery begins.
However, Reserve Bank of Malawi (RBM) Governor Charles Chuka said recently he expects inflation to be between 21 and 24 percent end-year with an average of between 17.5 percent and 19.8 percent for the year.
Analysts have predicted that the country's inflation will continue soaring in the next few months as a result of the liberalization of the exchange rate regime, which has raised the price of the US dollar by about 70 percent and has fueled imported inflation.
The IMF believes Malawi's fiscal and monetary policies are expected to put inflation back on a downward path by early 2013.