Household budgets Still under pressure

 Household budgets Still under pressure

 Centre for Social Concern (CfSC) says households budgets continue to be under pressure with latest figures showing that the cost of living has jumped by five percent.

This means that a family of six now requires K455 707 to survive in a month, a rise from last month’s K433 793 and Blantyre remains the most expensive city in the country, according the CfSC Basic Needs Basket.

In a statement accompanying the report, CfSC has urged individuals to review and adjust their budgets to accommodate increased living costs, prioritise essential expenses and cut spending.

Reads in part the Basic Needs basket report: “The burden of increased living costs may disproportionately affect lower-income individuals and exacerbate income inequality.

“Sustained increase in the cost of living contributes to inflationary pressures, impacting the overall economy.”

Speaking in an interview yesterday, Lilian Jere, a single mother of three who works in Blantyre said much of her K500 000 monthly wage is now being spent more on consumption than investment.

She said: “I can’t even save for tomorrow as all of my earnings are being drained with the rising cost of living.

“I have had to cut down on some luxuries such as television subscription and travel, but it is not yielding anything.”

For Maxwel Madula, who works as a security guard, life is unbearable. With a monthly salary of K50 000, which is below the revised minimum wage of K90 000, he is just as hopeless.

“It’s sad that my salary is only enough to buy a bag of maize,” he said.

Consumers Association of Malawi executive director John Kapito said in an interview yesterday the cost of living has been rising gradually, putting most households under pressure.

He said: “With inflation rate above 30 percent, it will remain hard for most consumers.

“It requires a lot of effort from all sectors of the economy to reduce our current expenditure and control our appetite for non-productive activities.”

On his part, economist Bond Mtembezeka urged households to optimise their budgets further to weather the economic storm.

“But that has an implication where it can stall an economy due to depressed aggregate demand,” he said.

Meanwhile, inflation, the general rise in the prices of goods and services, has continued to rise, peaking at 34.5 percent in December 2023, a 1.4 percent rise from the previous month, according to National Statistical Office figures.

The CfSC report shows that among the commodities with notable price increases are beans, water tariffs, electricity, housing, charcoal, onions and tea leaves.

To cushion the most vulnerable people from the cost of living crisis, Ministry of Finance and Economic Affairs has since expanded coverage of social protection programmes following the 44 percent kwacha devaluation in November last year.

Among others, the ministry will increase social cash transfer beneficiary coverage from two million to three million people and continue with the implementation of Cyclone Freddy recovery intervention, targeting 184 920 households where beneficiary households will receive K150 000 per month to support consumption needs.

Treasury also plans to re-introduce the price shock urban emergency cash transfer programme targeting 105 000 families with a once-off transfer of K150 000 covering three months, translating to another K1.57 billion.

Last week, Ministry of Labour gazetted the new minimum wage rates for general workers from K50 000 to K90 000 per month while for domestic workers, the minimum wage is now pegged at K52 000 from K38 000 per month. n

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