ECONOMIC POLICY AND RESEARCH DEPARTMENT

MARKET INTELLIGENCE REPORT FOR MARCH 2023

1 OVERVIEW
● The benefits of aggressive monetary policy stance
2 DEVELOPMENTS IN SELECTED
adopted mostly by some advanced and emerging
ADVANCED AND EMERGING MARKET
market economies to curb inflation have started to
ECONOMIES 1
manifest, as evidenced by easing inflationary
pressures experienced by majority of these
2.1 INFLATION DEVELOPMENTS
economies during the quarter under review.
● Meanwhile, the food insecurity problem facing most ● Inflation developments in the selected advanced and
of the Sub-Saharan African (SSA) countries, in emerging market economies in March 2023
addition to weak currencies emanating from the depicted an easing inflationary trend (Chart 1).
impact of tight monetary policy stance in advanced
economies, continues to exert pressures on their Chart 1: Inflation Rates in Selected Advanced
inflation. and Emerging Market Economies2
12.0
● Despite the easing pressures, central banks in
advanced economies and partly in emerging market
economies continue to prioritize restoring inflation 10.0

to their targets through further tightening of their

monetary policy stance. 8.0

● The perception in the SSA is, however, mixed as 6.0

considerations for both price stability and economic
growth is influencing some central banks to adopt a 4.0
neutral stance.
● Meanwhile, developments in the commodity 2.0
markets indicate that prices of key commodities
continue to decline, which is contributing to easing 0.0
Mar-19

Sep-19

Mar-20

Sep-20

Mar-21

Sep-21

Mar-22

Sep-22

Mar-23
Jun-19

Jun-20

Jun-21

Jun-22
Dec-19

Dec-20

Dec-21

Dec-22
imported inflation to countries.
-2.0
● Domestically, inflation slightly edged up in
2023Q1, on account of non-food price pressures.
The Malawi kwacha remained relatively stable USA UK
against the US dollar during March 2023. However, EURO AREA CHINA
the quarterly movements revealed that the local INDIA
currency slightly gained value against the US dollar
in 2023Q1.
● In the Euro area, for instance, inflation eased to 6.9
percent in March 2023 from 8.5 percent in the
preceding month. This development was on account

1 These countries were selected due to their significant contribution 2 This chart has been derived using data sourced from
in the composition of Malawi’s merchandise trade websites of central banks and statistical bureaus for the
selected countries
1
 of a reduction in the cost of energy and a softer pace Consequently, the US dollar lost 1.5 percent against
of growth in the prices of non-energy industrial the IMF SDR during the period.
goods. Subsequently, the 2023Q1 average inflation
● As a result, the British pound, euro, Chinese yuan
was lower at 8.0 percent than 10.0 percent for
and Indian rupee appreciated, gaining 2.9 percent,
2022Q4.
2.8 percent, 1.1 percent and 0.8 percent against the
● Similarly, the UK’s March 2023 inflation US dollar in March 2023, respectively.
decelerated to 10.1 percent from 10.4 percent in
● Quarterly exchange rates movements indicate that
February 2023. Inflation remained above the 10
appreciations of 2.4 percent and 1.8 percent were
percent mark for a seventh consecutive period and
experienced by the British pound and euro,
the 2.0 percent target for almost two years. On a
respectively. Similarly, the Chinese yuan and Indian
quarterly basis, inflation moderated to 10.2 percent
rupee also strengthened against the US dollar, by 0.7
in 2023Q1, from 10.8 percent in the previous
percent each. In contrast, the US dollar weakened by
quarter.
1.1 percent against the SDR.
● Inflation in the USA also moderated for the ninth
Chart 2: Monthly Exchange Rate Changes in
consecutive month to 5.0 percent in March 2023,
Selected Advanced and Emerging Market
from 6.0 percent in the preceding month. The
Economies4 5
outturn largely reflected the impact of a decline in
energy prices (gasoline and fuel oil). In tandem with
the monthly performance, the 2023Q1 average 3.00
inflation was also lower at 5.7 percent than 7.1
percent for 2022Q4.
● In China, the March 2023 inflation was also lower
at 0.7 percent than 1.0 percent for the preceding 1.47
month, bringing the 2023Q1 average to 1.3 percent
from 1.8 percent in 2022Q4. The decline was 1.00
supported by easing costs of both food and non-food
on the back of an uneven economic recovery after
lifting of the zero-COVID policy.
USA INDIA CHINA EURO UK
● Likewise, India’s inflation moderated to 5.7 percent
in the month under review, from 6.4 percent in
-1.00 -0.80
February 2023. This performance was necessitated
by a slowdown in costs of food, especially -1.10
vegetables, meat, oils and fats. However, the
2023Q1 average was 0.1 percentage points above
that of 2022Q4.

-3.00 -2.80
2.2 EXCHANGE RATE DEVELOPMENTS -2.90

● During March 2023, currencies of all the sampled

advanced and emerging market economies
appreciated against the US dollar. Conversely, the
US dollar depreciated against the IMF’s Special
Drawing Right (SDR)3 (Chart 2).
● The US dollar retreated from 2023 highs after the
collapse of two US banks portrayed less scope for
the Federal Reserve to increase interest rates.
2.3 COMMODITY PRICE DEVELOPMENTS
2.3.1 BRENT CRUDE OIL
● Global Brent crude oil prices dropped for the second
consecutive month and traded at US$78.5 per barrel
in March 2023, from US$82.7 per barrel in the prior
month. Similarly, the 2023Q1 average price
declined to US$81.4 per barrel from US$88.4 per

3 Unlike all countries whose exchange rates have been expressed in 4 This chart has been derived using data sourced from websites of
terms of the US dollar, the US exchange rate was expressed in terms central banks and statistical bureaus for the selected countries
of the IMF Special Drawing Right. 5
Depreciation (+); Appreciation (-)

2
 barrel in 2022Q4. However, there was varied
reaction in individual countries to this development.
● In the UK, for instance, petrol prices marginally
dropped to GBP1.47 (US$1.82) per litre in March
2023, from GBP1.48 (US$1.81) per litre in the
previous month. The price of diesel also slightly
declined to GBP1.66 (US$2.05) per litre, from
GBP1.69 (US$2.03) per litre during the same
period.
● On the other hand, retail prices in the US increased
for petrol to US$0.94 per litre in March 2023, from
US$0.92 per litre in the preceding month, but
declined for diesel to US$1.11 per litre, from
US$1.16 per litre in the preceding month.
● Meanwhile, in India, prices of both petrol and diesel
remained unchanged for the tenth consecutive
month, and remained at INR96.76 (or US$1.18) per
litre and INR89.66 (or US$1.09) per litre,
respectively.
2.3.2 CRUDE VEGETABLE OIL
● In the market for crude vegetable oil, prices depicted
mixed performances during the month under
review. Notably, the price for soybean oil dropped
to US$1,113 per metric tonne in March 2023 from
US$1,243 per metric tonne in the preceding month.
The decrease reflected weakening of demand from
major importing countries and the projected
increased production of soybean from Brazil and
Argentina. Subsequently, the average price for
soybean oil waned to US$1,236 per metric tonne in
2023Q1 from US$1,546 per metric tonne in
2022Q4.
● On the contrary, palm oil prices registered a
monthly increase of 2.3 percent to US$972 per
metric tonne in March 2023, on account of low
harvest in Southeast Asia following unfavorable
weather and flooding in some of the producing
countries. Further, palm oil prices increased as a
result of limited global exportable supplies amid
temporary export restrictions imposed by Indonesia.
Consequently, on a quarterly basis, the average
price of palm oil edged up to US$955 per metric
tonne in 2023Q1, from US$925 per metric tonne in
the preceding quarter.
2.3.3 WHEAT
● The global price for wheat registered a decline of 6.3
percent in March 2023 to US$369.9 per metric tonne,
from US$394.8 per metric tonne in the previous
month, driven by ample global supplies and strong
competition among exporters. The extension of the
Black Sea Grain Initiative, which allows Ukraine to
continue to export from its Black Sea ports, also
contributed to the supply-induced price decrease. In
addition, high production estimates for Australia
along with improved crop conditions in the European
Union in the review month, improved the global
supply outlook and, therefore, triggered declining
prices for this commodity. Strong competition from
the Russian Federation, where high supplies continue
to support competitive prices, also sustained the
downward pressure on market prices. As a result, the
quarterly average price of wheat at US$381.7 per
metric tonne, was lower than US$415.7 per metric
tonne for 2022Q4.
2.3.4 MAIZE PRICES
● Maize prices averaged US$282.49 per metric tonne
in March 2023, down from US$298.2 per metric
tonne in the preceding month and compared to
US$335.53 per metric tonne. Quarterly, maize prices
averaged US$294.48 per metric tonne in 2023Q1
from US$322.24 per metric tonne in 2022Q2 and
compared to US$301.59 per metric tonne in 2022Q1.
2.3.5 FERTILIZERS
● Global fertilizer prices also depicted a declining
trend during the month under review. In particular,
the price of Di-ammonium Phosphate (DAP)
dropped by 1.1 percent to US$606.0 per metric tonne
in March 2023 from US$612.5 per metric tonne in
February 2023. The decrease was explained by
sustained low prices of inputs. Subsequently, the
average DAP price of US$616.5 per metric tonne in
2023Q1 was below that of 2022Q4 at US$671.9 per
metric tonne.
● Similarly, the price of urea also declined by 12.3
percent in March 2023 to US$313.5 per metric tonne,
from the preceding month’s position of US$357.5 per
metric tonne. This contributed to the reduction in the
2023Q1 average to US$371.6 per metric tonne, from
US$581.5 per metric tonne in 2022Q4.
3 DEVELOPMENTS IN SELECTED SUB-
SAHARA AFRICAN ECONOMIES
3.1 INFLATION DEVELOPMENTS
● Inflation developments across the SSA countries
were diverse in March 2023. For instance, in Zambia,
inflation picked up to 9.9 percent in March 2023 from
9.6 percent in the preceding month. The upturn
reflected the effects of a weaker Zambian kwacha,
3
 which pushed up prices of some imported
commodities, such as gasoline and cereals. However,
on a quarterly basis, inflation subsided to 9.6 percent
in 2023Q1 from 9.8 percent in 2022Q4.
● Likewise, Rwanda’s inflation edged up to 31.0
percent in March 2023 from 30.3 percent in the
previous month. The upturn was propelled by rising
costs of food and non-alcoholic beverages notably,
vegetables, bread and cereals. However, the 2023Q1
average inflation was lower at 30.8 percent than 32.2
percent for 2022Q4.
● The Mozambican economy also registered a rise in
inflation to 10.8 percent in March 2023 from 10.3
percent in the previous month, as prices for both food
and non-food items continued to advance sharply.
Nevertheless, the average inflation for 2023Q1 at
10.3 percent was below 11.3 percent for 2022Q4.
● Nigeria’s inflation slightly picked up for the third
month to 22.0 percent in March 2023, from 21.9
percent in the prior month. Food inflation, which
constitutes a larger component of Nigeria's inflation
basket, inched up to 24.5 percent during the review
month, from 24.4 percent in February 2023. The
upturn was attributed to increases in costs of food
items such as oil and fats, bread and cereals, potatoes,
yam and other tubers, fish, fruits, meat, vegetables
and spirits. Additional upward pressures arose from
high costs of transportation, and housing and utilities
due to the progressive hikes in electricity tariffs and
energy prices, as well as miscellaneous goods and
services. As a result, the country’s 2023Q1 inflation
averaged higher at 21.9 percent than 21.3 percent for
2022Q4.
● In Botswana, the March 2023 inflation rose to 9.9
percent from 9.1percent in the preceding month. The
sources of pressures were mainly high costs of
transportation, food, non-alcoholic beverages and
miscellaneous goods and services. However, the
average inflation for 2023Q1 abated to 9.4 percent
from the preceding quarter’s level of 12.6 percent.
● South Africa's inflation slightly rose to 7.1 percent in
March 2023 from 7.0 percent in the preceding month.
The upward pressures emanated from increased costs
of both food and non-food items, including
transportation. However, the quarterly average
inflation declined to 7.0 percent in 2023Q1 from 7.4
percent in the preceding quarter.
● Meanwhile, inflation in Kenya remained stable at 9.2
percent as recorded in February 2023. This was a
result of a slowdown in prices of transportation,
housing, utilities, furnishings and household
equipment. Subsequently, the average inflation for
2023Q1 decreased to 9.1 percent from 9.4 percent in
the preceding quarter.
● Similarly, Namibia’s inflation of 7.2 percent in
March 2023, was same as in the previous month.
Quarterly, inflation averaged 7.1 percent in 2023Q1
from 7.0 percent in 2022Q4. Pressures continued to
emanate mostly from prices of food, non-alcoholic
beverages and transportation.
● In contrast, inflation in Ghana eased for the third
month to 45 percent in March 2023, down from 52.8
percent in February 2023 and after reaching a more
than two-decade high of 54.1 percent in December
2022. This was the lowest reading since October
2022, as a stronger currency softened the increases in
prices of both food and non-food items. However, the
2023Q1 inflation at 50.5 percent was higher than
48.3 percent for the preceding quarter.
● Tanzania’s inflation also slowed down for the second
month to 4.7 percent in March 2023, from 4.8 percent
in the previous month. This was the lowest reading
since August 2022, amid moderate increases in costs
of transportation and other food and non-food items.
As a result, the 2023Q1 average was slightly lower at
4.8 percent than 4.9 percent for 2022Q4.
● Uganda’s inflation eased for the fifth straight month
to 9 percent in March 2023, from 9.2 percent in the
previous month. It was the softest reading since
August 2022, as prices slowed down primarily for
furnishings, household equipment, recreation,
culture, transportation, housing and utilities.
Consequently, the 2023Q1at 9.5 percent was below
10.5 percent recorded in 2022Q4.
● Similarly, the Angolan economy continued to
register a declining trend in inflation, which eased to
10.8 percent in March 2023, from 11.5 percent in the
prior month. This was on the back of a less volatile
Angolan kwanza in the month under review.
Consequently, the 2023Q1 average inflation declined
to 11.6 percent from 15.3 percent in 2022Q4.
3.2 EXCHANGE RATE DEVELOPMENTS
● In March 2023, performance of currencies for
selected SSA economies was diverse (Chart 3).
● The Zambian kwacha, Kenyan shilling, Ugandan
shilling and Rwandan franc registered monthly
depreciations of 8.1 percent, 4.3 percent, 1.8 percent
and 1.6 percent against the US dollar, respectively.
The Angolan kwanza and Tanzanian shilling also lost
4
 value against the US dollar by 0.2 percent each, dollar during 2023Q1. Specifically, the Zambian
during the same month. kwacha, the Ghanaian cedi, Kenyan shilling, South
African rand, Rwandan franc and Ugandan shilling
● The Kenyan shilling and Zambian kwacha
lost 18.2 percent, 16.0 percent, 7.3 percent, 5.9
depreciated following strong demand for imports,
percent, 3.6 percent and 1.9 percent against the US
especially oil and energy sectors, against limited
dollar, respectively. The Botswana pula and
supply of hard currency.
Nigerian naira registered quarterly depreciations of
● Conversely, the Ghanaian cedi, South African rand 2.7 percent each, while the Angola and Tanzanian
and the Botswana pula recorded monthly shilling also lost 0.2 percent each, during 2023Q1.
appreciations of 8.8 percent, 2.4 percent and 1.4
percent, respectively, against the US dollar in March 3.3 FUEL PRICE DEVELOPMENTS
2023.
● Despite the continued declining global crude oil
prices in the month under review, retail fuel price
Chart 3: Monthly Exchange Rates Changes in Sub-
developments for the selected SSA economies were
Saharan African Economies 6
miscellaneous. For instance, South Africa’s retail
price for petrol increased to R22.65 (US$1.31) per
litre in March 2023, from R21.38 (US$1.24) per
7.00
litre in the preceding month. Diesel price also
dropped to R21.62 (US$1.25) per litre from R21.32
(US$1.23) per litre during the same period.
3.00 ● Similarly, in Tanzania, the retail pump price for
petrol edged up to TSh3,026 (US$1.29) per litre in
March, from TSh2,878 (US$1.24) per litre in
February 2023. Diesel prices also rose to TSh3,189
-1.00
Ghana
Zambia
Kenya

Rwanda
Tanzania

Malawi

Mozambique
Uganda

Angola

Nigeria

Botswana
South Africa

(US$1.37) per litre, from TSh3,163 per litre

(US1.36) during the period.
-5.00 ● The Botswana Energy Regulatory Authority
(BERA) also revised the retail pump price upwards
for petrol to BWP20.12 (or US$1.55) in March
2023, from BWP19.16 (or US$1.45) per litre in the
-9.00
preceding month. The BERA further raised the
retail price of diesel to BWP20.85 (US$1.61) per
litre from BWP20.32 (or US$1.54) per litre during
● The Ghanaian cedi appreciated on account of the the same period.
government’s decision to suspend external debt
● In Zambia, retail pump price for petrol was adjusted
payments and this eased the demand for US dollars
to ZK28.52 (US$1.37) in March 2023, up from
on the local foreign exchange market. On the other
ZK27.22 (US$1.33) in February 2023, while the
hand, the appreciation of the South African rand was
retail pump price for diesel was unchanged at
supported by the SARB’s decision to raise its main
ZK29.25 (US$1.38) per litre.
interest rate by a higher than forecast 50 basis points
to 7.75 percent at its recent MPC meeting, which ● On the other hand, the Energy and Petroleum
implied improved investor’s demand for rand- Regulatory Authority (EPRA) of Kenya maintained
denominated assets. retail fuel prices for both petrol and diesel at
Ks177.30 (US$ 1.35) and Ks162.00 (US$1.23) per
● Meanwhile, the Nigerian naira and the Mozambican
litre in March 2023, respectively.
metical remained stable during the month under
review. ● Similarly, in Rwanda, retail pump prices were at
FRw1,544 (or US$1.41) per litre for petrol and
● The quarterly trends indicate that all the selected
diesel at FRw1,562 (or US$1.43) per litre for diesel,
SSA countries’ currencies, except for the
as in February 2023.
Mozambican metical, depreciated against the US

6
Depreciation (+); Appreciation (-)

5
4 DOMESTIC DEVELOPMENTS kwacha appreciated by 0.08 percent against the US
dollar in 2023Q1.
4.1 INFLATION DEVELOPMENTS
4.3 FUEL PRICE DEVELOPMENTS
● Domestic inflation accelerated to 27.0 percent in
March 2023 from the previous month’s record of  In this reporting period, the Malawi Energy
26.7 percent. This is the highest reading since June Regulatory Authority (MERA) retained the retail
2013. The uptick was on the back of an increase in pump price for both petrol and diesel at February
food inflation to 32.4 percent in March 2023. The 2023 prices. Petrol and diesel were fetching
increase was seasonal but was compounded by basal MK1,746 (US$1.69) and K1,920 (US$1.86) per litre,
effects of low prices during the same period in 2022. respectively.
Non-food inflation, on the other hand, slightly went
4.4 MAIZE PRICE DEVELOPMENTS
down to 20.2 percent from 20.5 percent that was
reported in the previous month.  According to the Malawi Maize Market Report
● Subsequently, the 2023Q1 average inflation published by the International Food Policy Research
increased to 26.5 percent from 26.0 percent in Institute (IFPRI) in April 2023, the retail prices of
2022Q4. As shown in Chart 4, inflation is a maize in March 2023 averaged K733 (US$0.71) per
challenging in majority of the SSA countries, but kilogram, a 16.0 percentage increase from the
the problem is serious in Ghana, Rwanda, Malawi previous month’s position of K632 (US$0.61) per
and Nigeria, in that order. kilogram and 283 percent higher than the ruling price
during a similar period in 2022. Consequently, the
Chart 4: Inflation Rates in Selected SSA retail average price of maize in 2023Q1 increased to
Countries K625.5 per kilogram from K453.8 per kilogram in
2022Q4.
60.0
 During the first two weeks of April 2023, maize
50.0 prices dropped to an average of K676 per kilogram,
on account of improved supply following the
commencement of the harvesting season.
40.0

5 CONCLUSION
30.0
 Despite the favourable inflation performance
20.0 reported in some countries, it will take some time for
most of the global economies to achieve levels of
10.0
inflation within their central bank targets. The
outlook is mostly less optimistic for Sub-Saharan
African (SSA) countries, where climate-induced
0.0
food insecurity challenges have exacerbated the
Mar-20

Sep-20

Mar-21

Sep-21

Mar-22

Sep-22

Mar-23
Jun-20

Jun-21

Jun-22
Dec-20

Dec-21

Dec-22

pressures which were initially triggered by the

-10.0
COVID-19 pandemic imbalances and, thereafter,
compounded by the Russia-Ukraine war. Reversion
Angola Botswana to growth-enhancing single-digit levels of inflation
Nigeria Mozambique requires that there be a protracted period of tight
South Africa Zambia monetary policy stance in order to anchor inflation
Kenya Rwanda
expectations and suppress the second-round effects
of the adverse supply-side shocks, which are
Malawi Tanzania
persistent in SSA countries due to the high frequency
Ghana of unfavourable climatic shocks. It is therefore not
surprising that global central banks continue to
tighten further their stance of monetary policy,
4.2 EXCHANGE RATE DEVELOPMENTS
despite the prevailing low levels of economic growth.
 The Malawi kwacha depreciated marginally by 0.01
percent against the US dollar and traded at K1,033.80
per dollar in March 2023 from the preceding month’s
record of K1,033.67 per dollar. Quarterly, the
6