Institute of Chartered Accountants in Malawi (Icam) says despite exceeding the quantitative inflation threshold, the overall assessment remains that Malawi does not meet the full criteria of a hyperinflationary economy.
Icam says International Accounting Standards (IAS) 29 defines and provides general guidance for assessing whether a particular jurisdiction’s economy is hyperinflationary.
The view by Icam comes a fortnight after the May 2025 forecast by EY Global, a multinational professional services firm, which indicated that the Malawi economy alongside 15 others remains in hyperinflation.
In April last year, auditing and business advisory firm PricewaterhouseCoopers (PwC) and another projection by EY Global in October of the same year indicated that Malawi is in hyperinflation, implying that prices of goods and services will continue to rise uncontrollably.
Giving an update on Malawi’s hyperinflation status on Sunday, Icam president Daniel Jere argued that determining whether a country meets the IAS 29 threshold requires evaluating qualitative and quantitative factors, including cumulative inflation and behaviours in the economy.
He said despite the high inflation, the other qualitative indicators of hyperinflation were not evident, adding that Icam will continue to monitor the situation and issue a comprehensive guidance as at June 30 this year.
Reads the update in part: “Most prices remain quoted in Malawi kwacha and the population continued to value it as legal tender for transactions in the country.
“There was no evidence of widespread immediate investment of local currency to preserve purchasing power or of prices and wages being indexed to inflation.”
EY Global earlier said the International Monetary Fund World Economic Forum reported a three-year cumulative rate of inflation of 116 percent as of December 2024 and forecast three-year cumulative rates of inflation of 102 percent and 66 percent for 2025 and 2026, respectively.
The report said the National Statistical Office (NSO) also reported three-year and 12-month cumulative rates of inflation of 118 percent and 30 percent, respectively as of March 2025.
Reserve Bank of Malawi spokesperson Boston Maliketi Banda said in an interview on Sunday that the central bank remains focused on the mandate of ensuring price stability by targeting to bring down inflation.
“The central bank believes that consistent tangible efforts on both demand and supply sides will bring inflation to low look levels that will benefit us all,” he said.
Meanwhile, Malawi’s year-on-year headline inflation rate dropped for the second month in a row, hitting 29.2 percent in April, according to NSO.
