The Reserve Bank of Malawi (RBM) Board Director, Pius Mulipa told the Presidential Task Force on Covid-19 that after assessments, it has been found that the coronavirus pandemic will impact on inflation. This is despite the central bank’s governor aiming to achieve a 5% inflation target despite the pandemic.

While RBM maintains that the social-economic impact of the pandemic is still unfolding and cannot be fully assessed and quantified, it is evident that the pandemic is having a severe impact on Malawi’s economy. For instance, the latest 2020 economic update by the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has foreseen a drop in the tourism sector’s growth, from -4.9% last year to -9.9%.

Last month, the central bank’s positivity to achieve a 5% inflation target by 2021 was mostly attributed to maize; an influx of maize in most traditional markets, following the harvesting season, which has contributed to a drop in prices on the market. On the other hand, Malawi is expected to produce about 3,691,866 metric tonnes of maize this season, up from 3,391,924 metric tonnes produced during the 2018/2019 season, representing an 8.8 percent increase.