Inflation Drops to 19.4%: A New Era of Stability for Malawi’s Economy

Key Business Points

• Price growth is easing, but not disappearing: September inflation fell to 19.4 percent, giving businesses room to plan, but non-food inflation remains high at 31.5 percent. Review prices and budgets now rather than assume costs will keep falling.
• Protect margins and cash flow: Stable maize prices are helping, while exchange-rate effects still push up the price of fuel, transport and imported inputs. Businesses should control procurement costs and consider realistic price adjustments.
• Prepare for weather and supply risks: The lean season, possible El Niño conditions and Middle East fuel price tensions could reverse progress. Local entrepreneurs should secure supply, hold prudent reserves and monitor official price updates.

Inflation eases, but business cost pressures remain

Malawi’s year-on-year headline inflation rate declined to 19.4 percent in September 2026, according to National Statistical Office data. The average for the third quarter was 20 percent, compared with 28.1 percent in the same period last year.

This was the first reading below 20 percent since May 2022, when the rate was 19.1 percent. It fell from 20 percent in August, mainly because food price pressures eased. Food inflation slowed to 12.5 percent from 13.4 percent, while non-food inflation eased only slightly, to 31.5 percent from 31.8 percent.

For Malawi’s business community, lower inflation can improve purchasing power and reduce the risk of sharp, repeated price increases. It also gives lenders and investors a more stable picture. However, the gap between food and non-food inflation shows that businesses dependent on fuel, electricity, transport, foreign currency or imported materials are still under considerable pressure.

Economics Association of Malawi president Bertha Bangara Chikadza welcomed the decline but said falling food inflation had offset, rather than removed, non-food pressure. She warned that lean-season demand could raise maize prices. Renewed tensions in the Middle East could also increase fuel prices.

RBM deputy governor Kisu Simwaka said disinflation is broadly in line with the central bank’s forecast of 22 percent annual inflation for 2026, down from 28.4 percent in 2025 and 32.2 percent in 2024. He expects inflation to remain in the teens in the fourth quarter, but cautioned that the path could be volatile. He said non-food inflation has barely moved, suggesting earlier exchange rate adjustments are still passing through to domestic prices through import costs.

Mzuzu University economics lecturer Christopher Mbukwa linked the improvement to stability in maize prices. He warned that the still-high non-food rate could lift headline inflation in coming months.

Consumers Association of Malawi executive director John Kapito said households may not immediately feel relief. Nico Asset Managers also identified high inflation as a major economic risk because it weakens purchasing power.

The RBM’s 2026 Third Monetary Policy Statement highlighted domestic and external risks. It specifically noted that possible El Niño conditions during 2026/27 could affect crop availability and food prices. External fuel risks remain relevant too.

Business owners should therefore treat September’s improvement as useful planning information, not a guarantee. A practical next step is to track the mtseri wa mitengo, or price trend, weekly and stress-test budgets for higher maize, fuel and import costs. Firms with local supplier networks can use this period to build stronger relationships, while importers should review forex exposure and pricing schedules. Local entrepreneurs can also identify products and services that may become more viable as household budgets gradually recover.

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