@article{Ularo:117802,
      recid = {117802},
      author = {Ularo, Khonje Makaiko Gonapanyanja},
      title = {FOOD INFLATION IN MALAWI: IMPLICATIONS FOR THE ECONOMY},
      address = {2010-09},
      number = {634-2016-41446},
      pages = {93},
      year = {2010},
      abstract = {Despite consecutive years of good harvest, Malawi has  experienced continuous price escalation of staple food  commodities unsolved over the time. The real price of maize  in Malawi has increased by 141 percent between 1998 and  2008, and has been rising along with the food prices of  many other commodities over this period. This study  therefore investigates the determinants of food inflation  rate in Malawi and its effect on the economy. Monthly and  annual data were collected from National Statistical Office  and Reserve Bank of Malawi from 1978 to 2008. Data were  analyzed by estimating an error correction model (ECM). The  results show that fertilizer prices, crop diversification  index, maize prices, diesel prices, real exchange rates and  real interest rates significantly and positively influenced  the rate of food price inflation in Malawi. In addition,  the annual rate of food inflation, exports, imports, real  interest rate and real exchange rate significantly  influenced real agricultural output (GDP) and national GDP  at 1 and 5 percent levels respectively. Furthermore, high  food price inflation induced low purchasing power to  consumers thereby reducing expenditure on consumable goods.  Real national output (GDP) and agricultural GDP were  negatively affected by food price inflation. The study  recommends that a deliberate policy is needed to promote  crop diversification in order to reduce food inflation  emanating from monotonic food products. Policy makers also  need to review exchange rate policy and move towards  flexible exchange rate regime (e.g. crawling peg).},
      url = {http://ageconsearch.umn.edu/record/117802},
      doi = {https://doi.org/10.22004/ag.econ.117802},
}