Rising food prices have impacted households’ budgets by reducing consumption levels, resulting in declining welfare and counteracting improvements in economic growth, the World Bank has said.
In its recent analysis on the economy, the bank said this has, in turn, stagnated Malawi’s efforts to reduce poverty levels.
Business transactions in a produce market
Reads the analysis in part: “Rising commodity prices will also exert upward pressure on inflation. Supply- related pressures on the agriculture sector due to weather shocks could push average annual inflation into double digits.
“Due to the weather-related shocks affecting agricultural productivity and incomes, the share of the population below the international $1.90 [about K1 566] poverty line is projected to stagnate around 74 percent in 2022 and 2023.”
Published World Food Programme (WFP) data shows that to maintain existence and cover lifesaving needs, which could involve the deprivation of certain human rights, urban households need at least K79 292 per month while rural households need at least an average of K55 461 to survive.
On the other hand, a family of six needs at least K255 593 a month to afford basic living, according to data from the Centre for Social Concern.
Meanwhile, the minimum wage has remained at K50 000 amid declining incomes.
But inflation has also continued to bite hard, with National Statistical Office data showing it rose to 14.1 percent in March on account of rising food prices, up from 13 percent recorded in February.
In an interview, Consumers Association of Malawi executive director John Kapito said the rising inflation is being heavily felt by consumers as the cost of living continues to soar.
He said: “All of a sudden, things have fallen apart as almost everything has gone up with no cushioning mechanisms for the ordinary consumer.
“The current economic situation is sustainable and there is a need for market interventions by government because people are tired and hurt.”
Meanwhile, WFP projects prices of key food commodities to remain elevated throughout 2022 due to these external economic shocks as well as the adverse effects of the two co-variate climate shocks experienced this year, flooding and prolonged dry spells.