RBM Sees Inflation Reprieve: New Opportunities for Malawi’s Economic Growth

Key Business Points

• The Reserve Bank of Malawi (RBM) has projected an optimistic inflation outlook for the near-term, driven by easing food prices, which bolsters Malawi’s resilience to external shocks.
• The inflation rate has dropped to 27.9 percent in November 2025, and lower sustained inflation may create room for a less restrictive monetary policy, potentially lowering borrowing costs over time.
• Improved macroeconomic stability is critical for Malawi’s economic recovery, and sustained easing in headline inflation, especially if supported by stable food prices, would be a positive development for the economy.

The Reserve Bank of Malawi’s (RBM) latest Market Intelligence Report has brought welcome news for Malawi’s business community, with an optimistic inflation outlook for the near-term. The report notes that the inflation rate has dropped to 27.9 percent in November 2025, down from 29.1 percent the previous month. This decrease is attributed to lower food prices, particularly the declining price of maize, which has been driven by increasing supply on the market. According to RBM Deputy Governor Kisu Simwaka, the easing of inflation could prompt the central bank to lower the policy rate, which would have a positive impact on commercial banks’ lending rates.

Economics Association of Malawi president Bertha Bangara Chikadza has cautioned that optimism should be viewed as conditional, dependent on improved fiscal management, exchange rate availability, domestic production, and policy implementation. However, if the cautiously optimistic outlook materializes, it would signal that Malawi’s economy is beginning to withstand external shocks, even in the midst of global uncertainty. This would be a positive development for the economy, as sustained easing in headline inflation would improve macroeconomic stability, which is critical for recovery.

University of Malawi associate professor of economics Gowokani Chijere Chirwa has emphasized the importance of intensifying production, particularly in the agricultural sector, to sustain the trend of easing inflation. He also advised the central bank to hold on to its current policy, which has helped to keep inflation in check. Economist Edward Leman has noted that lower and more predictable inflation reduces uncertainty and supports investment decisions, which is key for medium- to long-term planning.

As the RBM Monetary Policy Committee has kept the policy rate at 26 percent, with commercial banks’ lending rates at as high as 37 percent due to inflationary pressures, businesses can draw some assurance of relatively stable conditions. This stability is crucial for zinthu zokwana za bizinesi (business growth) and kugwiritsa ntchito (investment) in Malawi. With the right policies and conditions in place, Malawi’s economy can continue to kukula (grow) and become more stable and competitive in the region.

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