Economists have warned that the declining inflation rate may rise again if authorities will not manage politicians’ cash splashes during campaign period.
The unstable economy has of-late started to show minor signs of a possible recovery and most recently, February inflation figures declined from over 25% to 24.6%.
Speaking in an interview with a local radio station, social and economic analyst Mabvuto Bamusi said this plus the opening of tobacco season smell a positive future that can lead to further reduction of inflation up to 18% by the end of the season.
“I should believe that the diminishing cost of living measurement will go on and it may be at somewhere around 18% by the end of tobacco season.
“But it must also be said that at 24% the rate remains higher than the required levels for a country like Malawi as the ideal figures should be between 15 and 7%.” Bamusi said.
However, Bamusi expressed fear that the impending splashes of money by politicians during this official campaigning period if not managed properly, could turn up inflation graph yet again.
“Another threat to cause inflation rise is the impending money splashes from politicians during this campaign period.
“If this will not be properly monitored and managed by authorities it will eventually push inflation up again even when the economy could be supplied with reasonable forex from Tobacco auctioning”, Bamusi further said.
Inflation recorded the highest ever points of 37% around April last year and though positive efforts were cooling it down, effects of cash-gate and the subsequent donor budgetary support withdrawal made it start rising again until last month.