The below Parliamentary question was asked by Catherine West on 2016-01-28.
To ask the Secretary of State for International Development, what assessment she has made of the effect of high inflation in Malawi.
Mr Nick Hurd
Malawi has one of the highest rates of inflation in Africa: double digit inflation is commonplace. High inflation, alongside high fiscal deficits, debt and interest rates, are lowering business confidence and crowding out private investment. Social services are being delivered from a constrained budget with high levels of government borrowing. Poor harvests in 2015 and poor rainfall due to the ongoing El Nino are affecting the national economy and Malawi is now facing its worst food insecurity crisis in a decade. The UK and international partners are responding.
DFID Malawi works closely with other development partners, in particular the World Bank and the International Monetary Fund (IMF), to monitor the macroeconomic situation in Malawi. The IMF’s Article IV Consultation in December 2015 concluded that “an appropriately tight fiscal policy is needed to support monetary policy actions aimed at placing inflation on a downward trajectory.” DFID is working with the World Bank to inform the Government of Malawi’s next Development Strategy.