Malawi inflation eases further on good harvest

Good maize harvests continued to help tame inflation in Malawi, with the headline number easing to 7.4 percent year-on-year in July from 7.7 in June, the National Statistical Office said.

Food inflation, which accounts for 58.1 percent of the impoverished southern African country's Consumer Price Index (CPI), dipped to 6.7 percent from 6.8 in June, the NSO said late on Thursday.

The data follows a decision by the Reserve Bank of Malawi earlier this month to cut its bank rate to 17.5 percent from 20, citing falling inflation and improvement in economic fundamentals.

Inflation fell to single digits for the first time in four years in January and has continued to ease during the course of 2007.

Malawi is enjoying a bumper maize harvest for the second consecutive year, partly attributed to a government policy to reintroduce input subsidies scrapped in 1996.

According to official data, the country has a surplus of 1.3 million metric tonnes of maize this season, up from 400,000 metric tonnes in the 2005/06 season.