Malawi’s inflation outlook is showing signs of stability and moderation, suggesting that disciplined monetary policy is beginning to yield results.
This is according to a 12-month inflation review by Chifi Mhango, Executive Director of Economic Research and Strategy at Don Consultancy Group (South Africa), who says the inflation trend over the past year has moved through three distinct phases.
He noted that between March and June 2025, inflation steadily declined due to easing food prices and favourable base effects, signalling early relief in food-driven price pressures.
However, Mhango said inflation rose again around October, reaching about 29.1 percent, driven largely by global oil price pressures that increased transport and production costs across the economy.
He added that in a country like Malawi, where import dependence and foreign exchange shortages remain significant, external shocks quickly feed into domestic prices.
Mhango further observed that the final quarter into early 2026 showed a stronger disinflation trend, with inflation falling from 27.9 percent in November to 23.8 percent by March 2026, indicating improving monetary control and easing pressures.
He said while food inflation has moderated due to improved agricultural output, non-food inflation particularly fuel, transport, and utilities remains high, reflecting imported cost pressures.
On monetary policy, he said the Reserve Bank of Malawi is likely to maintain its policy rate at 24 percent in the near term, adopting a cautious “wait-and-see” approach.
Meanwhile, Reserve Bank spokesperson Boston Maliketi Banda said the current inflation trajectory is encouraging, reflecting the impact of policy measures and improved food supply conditions, though risks remain from global commodity price shocks linked to geopolitical tensions.
He added that the central bank will continue monitoring domestic and external developments closely and act where necessary to safeguard price stability.
By Barbara Mwandira
