Key Business Points
- The cost of living for an average urban household in Malawi surged by 20.57 percent in 2025, with food prices rising 19.27 percent and non-food items increasing 23.01 percent.
- Supply chain weaknesses, high production costs, and exchange-rate pressures are driving up prices of essential goods, including onions, beef, eggs, and sugar.
- To mitigate the effects of high living costs, businesses and households must monitor macroeconomic fundamentals and adjust their budgets accordingly, as inflation is projected to remain high in 2026.
The latest cost of living analysis report from the Employers Consultative Association of Malawi (Ecam) reveals a significant increase in the cost of living for urban households in 2025. The basic needs basket, excluding transport expenses, rose by 20.18 percent from K739,021 to K888,165 during the year. Food prices were a major contributor to this increase, with onions recording a 263.18 percent surge and beef prices nearly doubling. Non-food items, such as toothpaste and bath soap, also saw significant price hikes.
The report highlights the challenges faced by urban households in Malawi, with the cost of living rising to K968,165 in December 2025. Economist Marvin Banda notes that 2025 will be remembered as a year when Malawians required a significant amount of money just to attain the cost of living, with the 20.57 percent rise in living costs confirming sustained economic pressure on urban households.
Banda attributes the high living costs to supply chain weaknesses, high production costs, and exchange-rate pressures, rather than shortages of staple grains alone. He warns that the outlook remains bleak unless macroeconomic fundamentals begin to show improvement. The Finance Minister, Joseph Mwanamvekha, acknowledges that rising living costs are eroding wages and putting pressure on businesses, while the Reserve Bank of Malawi Deputy Governor, Kisu Simwaka, suggests that the central bank may revise downward the policy rate if inflation continues to decline.
As Ndalama za kuwongola (inflation) remains a concern, businesses and households must be wachikondi (vigilant) and adjust their budgets accordingly. With inflation projected to remain high in 2026, it is essential for stakeholders to kongola zinthu (monitor things) and work together to reduce the msika wa chuma (cost of living). By doing so, Malawi’s business community can kulima ndi mphamvu (farm with strength) and kugwira ntchito kwambiri (work hard) to mitigate the effects of high living costs and drive economic growth.
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