The International Monetary Fund (IMF) has indicated that the risk of inflation reversal is now more real following quickening of the inflation rate to 9.9 percent year-on-year in March, from 7.8 percent the previous month.<\/p>\n
This becomes the highest inflation rate on record since inflation made a historic turn to hit single digit at 9.3 percent in August, from 10.2 percent in July 2017.<\/p>\n
Both IMF and the Economics Association of Malawi (Ecama) have indicated that the rising inflation rate is something that was expected.<\/p>\n
IMF Resident Representative to Malawi, Jack Ree, said following these developments macroeconomic policy should continue to focus on entrenching the gains in macroeconomic stability.<\/p>\n
Among other things, Ree said this will require reigning in on budget deficits, which increased significantly in the first half of 2017\/18 fiscal year due to revenue shortfalls and spending overruns.<\/p>\n
He said it will also require continued caution in the conduct of monetary policy, including RBM\u2019s interest rate decisions.<\/p>\n
\u201cThe re-rise of inflation to 9.9 percent in March is not something unexpected. In fact, disinflation since July 2016, when inflation rate peaked at 23.5 percent, to end-2017, has been driven mainly by the sharp deceleration of food price amid extraordinarily suppressed maize price.<\/p>\n
\u201c\u2026experts have expected inflation to rebound as maize price goes back to more historically normal levels,\u201d he said.<\/p>\n
According to Ree, fighting inflation is about managing expectations and he said this would only be possible, when the market has trust in a credible policy framework.<\/p>\n
He said the IMF\u2019s Extended Credit Facility (ECF) programme is designed to underpin this sort of credibility.<\/p>\n
As it stands, the IMF and government authorities reached a staff level understanding on a new ECF programme in February.<\/p>\n
\u201cThe IMF Board meeting to consider the programme is scheduled for late April. If this programme is approved and consistently implemented, I am confident that we will be able to manage a temporary reversal of inflation and lock in a new trend of high growth and stable inflation,\u201d Ree said.<\/p>\n
In a separate interview, Ecama President, Chikumbutso Kalilombe, said while the rise was something that was expected, there is optimism that inflation may decelerate in April.<\/p>\n
\u201cThe good thing is that we remain in single digit band; otherwise, this was expected, as we are at the peak of the lean season,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"
The International Monetary Fund (IMF) has indicated that the risk of inflation reversal is now more real following quickening of the inflation rate to 9.9 percent year-on-year in March, from 7.8 percent the previous month. This becomes the highest inflation rate on record since inflation made a historic turn to hit single digit at 9.3 […]<\/p>\n","protected":false},"author":3,"featured_media":55973,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-64205","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/posts\/64205","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/comments?post=64205"}],"version-history":[{"count":1,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/posts\/64205\/revisions"}],"predecessor-version":[{"id":64208,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/posts\/64205\/revisions\/64208"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/media\/55973"}],"wp:attachment":[{"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/media?parent=64205"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/categories?post=64205"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/tags?post=64205"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}