RBM Sounds Alarm: Navigating Non Food Price Hikes for a Resilient Malawian Economy

Key Business Points

• Inflation outlook remains uncertain due to rising non-food inflation, which could offset the easing of food inflation, and businesses should monitor price trends to adjust their strategies accordingly.
• Fuel price adjustments have driven up non-food inflation, and companies should factor in transportation costs when planning their operations and supply chains, considering the Chichewa phrase "kuthandiza kwa nkhani za ngozi" (managing fuel costs).
• Tight monetary policy and investing in irrigation are crucial to controlling inflation, and entrepreneurs should stay informed about monetary policy decisions and their potential impact on the economy, using terms like "tsikolo la chuma" (monetary policy) to understand the context.

The Reserve Bank of Malawi (RBM) has warned that the increasing threat of rising non-food inflation could dampen the country’s inflation outlook, despite easing food inflation. According to the RBM’s latest Market Intelligence Report, the 33.4 percent October 1 fuel pump price hike has exerted heightened pressure on prices of non-food items. This has led to a significant increase in non-food inflation, which has jumped to 23.8 percent, while food inflation has eased to 32.4 percent. The RBM attributes this trend to domestic fuel pump price adjustments, which have amplified inflation pressures despite easing food inflation.

The situation is further complicated by foreign exchange scarcity-induced fuel shortages, which exert pressure on transport costs. Economic analysts, such as Economics Association of Malawi president Bertha Bangara-Chikadza, emphasize the need to address the underlying food pressures and control non-food inflation. Bangara-Chikadza suggests that strengthening winter cropping initiatives is a critical intervention for long-term stability, using the Chichewa phrase "kuthandiza kwa mpango wa ulimi" (supporting agricultural planning).

Meanwhile, Centre for Social Concern programme officer for economic governance Agnes Nyirongo notes that high inflation is not only squeezing households but also stifling business growth. She argues that rising production and transport costs are being passed on to consumers, further fuelling inflation in a vicious cycle. Business Partners International country manager Bond Mtembezeka believes that it is still possible to reduce inflation in the medium-term, provided monetary policy remains tight and food supply is improved.

The Monetary Policy Committee of the RBM has maintained the policy rate at 26 percent, leaving commercial banks’ lending rates at as high as 37 percent due to inflationary pressures. As the RBM’s deputy governor for economics and regulation Kisu Simwaka expressed, continued tight monetary policy stance and aligning fiscal policy with monetary policy efforts are essential to controlling inflation. With the inflation rate moving to 29.1 percent in October from 28.7 percent in September 2025, businesses and entrepreneurs must stay vigilant and adapt to the changing economic landscape, considering the Chichewa phrase "kugwira ntchito kwa tsikolo" (working with the economy).

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