Reserve Bank of Malawi (RBM) has revised its 2019 annual inflation target from 8% to 9% owing to elevated maize prices.

A report by the Monetary Policy Committee (MPC) has attributed the increase to food price developments as food inflation averaged 13.5% in the second quarter from 11.9% in the first quarter propelled by high maize prices.

This year ’s maize surplus was estimated at 355 000 metric tonnes (MT) out of a total output of 3.3 million MT. In June 2019, inflation inched up by 0.1 percentage points to settle at 9% as food prices began to bite. Inflation remains anchored in single digit and averaged 9.0 percent in 2019Q2, which is 0.1 percentage points lower than 9.1 percent recorded in 2018Q2, but 0.3 percentage points higher than 8.7 percent recorded in 2019Q1,” reads the report.

Prior to the revision, the International Monetary Fund (IMF) backed Reserve Bank of Malawi’s inflation rate target, stating the target as attainable in the medium term, if the country does not slacken on the economic gains registered in the recent past. “Every five years, you see inflation changes because of elections. This year, we have a window of opportunity because, even after the elections, we have seen inflation in single digit despite the unfavourable dynamics,” said IMF Country Representative, Jack Ree.