Tight monetary policy slows money supply growth

Malawi’s Economic Outlook: Navigating 27.6% Inflation to Drive Business Growth and Investment Opportunities

Post was last updated: December 28, 2025

Key Business Points

  • Inflation forecast: The Economist Intelligence Unit (EIU) predicts Malawi’s 2025 annual inflation rate to be 27.6 percent, a slight decrease from the government’s projection of 28.9 percent.
  • Easing inflation: The inflation rate has decreased from 29.1 percent in October to 27.9 percent in November 2025, due to a 6 percent drop in maize prices, which may lead to moderate price growth.
  • Interest rates: The Reserve Bank of Malawi may consider reducing interest rates if the easing of inflation continues, which could have a positive impact on business loans and investment opportunities.

The Economist Intelligence Unit’s (EIU) revised forecast of Malawi’s 2025 annual inflation rate is a significant development for the country’s business community. The predicted rate of 27.6 percent is a slight decrease from the government’s projection of 28.9 percent, and a decrease from the previous forecast of 28.1 percent. This revised forecast comes as the inflation rate has averaged 29.4 percent from January to November 2025, according to the National Statistical Office (NSO). The easing of inflation is attributed to high base effects, which will moderate the rate of price growth.

The drop in inflation is largely due to the decrease in maize prices by 6 percent in November, which has had a positive impact on the overall inflation rate. However, as John Kapito, executive director of the Consumers Association of Malawi, noted, the drop in inflation is insignificant to consumers as prices of goods are still high. Kisu Simwaka, deputy governor for economics and regulation at the Reserve Bank of Malawi, stated that the stubborn nature of inflation has made the bank hesitant to reduce interest rates.

The inflation trends highlight the country’s underlying food pressures, according to Bertha Bangara-Chikadza, president of the Economics Association of Malawi. The zimepenya (inflation) has been a major challenge for wafrazieri (business owners) and wentrepreneurs (entrepreneurs) in Malawi, and the revised forecast provides some nthabwizi (relief). As the Reserve Bank of Malawi considers reducing interest rates, malo a kuwongolera (business opportunities) may arise, and wafrazieri should be prepared to take advantage of them. With the kusintha kwa chiwongolero (easing of inflation), wafrazieri and wentrepreneurs should closely monitor the market and adjust their maluwilo (business strategies) accordingly to remain competitive.

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Vanessa Banda
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