Taming Inflation: Malawi’s 28.4% Rate Sparks New Opportunities for Business Growth

Key Business Points

• Inflation rate drops: Malawi’s annual inflation rate has decreased to 28.4 percent, a 3.8 percentage point drop from 2024, driven by declining food prices, which is expected to continue and benefit businesses through chigawenga cha befule (reduced inflation).
• Economic stability: The easing inflation rate is a sign of utsiku wa chikulu (economic stability), which is critical for the country’s economic recovery and growth, making it an attractive opportunity for wafukula (investors) and wachuma (entrepreneurs).
• Potential policy rate cut: The Reserve Bank of Malawi (RBM) may consider reducing the policy rate to support economic growth, which could lead to chimwemwe cha ndalama (increased access to capital) for businesses and mfumukazi (entrepreneurs), thereby boosting ukongwe (productivity) and malezi (development).

The latest inflation figures released by the National Statistical Office (NSO) indicate a decline in the annual inflation rate to 28.4 percent, down from 32.2 percent in 2024. This decrease is attributed to the drop in food prices, which has been a significant contributor to inflation in the past. The NSO reported that the annual average food inflation rate declined to 33.2 percent from 40.2 percent, while non-food inflation averaged 20.7 percent, slightly lower than the 21.2 percent recorded in 2024. This trend is expected to continue, with the RBM projecting an optimistic inflation outlook for the near-term, driven by easing food prices, which will bolster malezi ya uchumi (economic growth) and ukongwe (productivity).

The RBM spokesperson, Boston Maliketi Banda, described the drop in annual average inflation rate as zabwino (encouraging) and expressed the central bank’s commitment to sustaining the momentum. The RBM Deputy Governor for operations, Kisu Simwaka, hinted at the possibility of a policy rate cut to support economic growth, citing the current trend as a sign that inflation has turned the corner. This potential policy rate reduction could lead to chimwemwe cha ndalama (increased access to capital) for businesses, thereby boosting ukongwe (productivity) and malezi (development).

Economics Association of Malawi president Bertha Bangara-Chikadza noted that 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 improve utsiku wa chikulu (macroeconomic stability), which is critical for the country’s economic recovery. Unima associate professor of economics Gowokani Chijere Chirwa said that if such projections materialize, it would be good news to the industry, as it would lead to malezi ya uchumi (economic growth) and increased chigawenga cha befule (reduced inflation).

The RBM’s Market Intelligence Report highlights the importance of stable food prices in supporting Malawi’s inflation resilience to external shocks. As the central bank considers a potential policy rate reduction, businesses and entrepreneurs should be prepared to take advantage of the anticipated chimwemwe cha ndalama (increased access to capital) and ukongwe (productivity) that could result from a policy rate cut. With the current trend indicating a decline in inflation, Malawi’s business community can look forward to a more zabwino (favorable) economic environment, characterized by utsiku wa chikulu (economic stability) and malezi ya uchumi (economic growth).

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