Malawi’s year-on-year headline inflation rate eased at the start of the second half, declining by 0.3 percentage points to 20.8 percent in July as economists remained cautious amid continuing non-food price pressures.
National Statistical Office (NSO) data show that the decline in the rate of inflation from 21.1 percent in June means that prices of goods and services have been on the decline since October 2025 when inflation was recorded at 29.1 percent.
The NSO Stats Flash indicates that despitethe rate of the general rise in rices of goods and services easing for the past months, pressure still exists on non-food inflation, which has remained high and continues to rise.
Reads part of the NSO Stats Flash: “Food inflation declined to 14.3 percent in July from 14.7 percent in June while non-food inflation increased slightly to 32.2 percent from 32.1 percent over the same period.”
The Reserve Bank of Malawi (RBM) said the downward trajectory is in line with its forecast of an annual rate of 22 percent from 28.4 percent in 2025 despite non-food inflation posing a threat to the outlook.
Writing on his Facebook page, RBM Deputy Governor for operations Kisu Simwaka said inflation could reach teens in the fourth quarter (October to December), but the disinflation path remains volatile because of high non-food inflation.
He said: “The real worry is that non-food inflation has barely moved. This stickiness tells us that past exchange rate adjustments are still transmitting to domestic prices through import prices.”
Simwaka said the volatility of the disinflation path signals that headline inflation is improving, but non-food inflation remains sticky.
Economics Association of Malawi president Bertha Bangara Chikadza, in an interview yesterday, described the ease in inflation rate as positive despite upside risks remaining.
She said that the consistent decline in inflation has largely been due to easing food inflation, which has been offsetting non-food inflation pressure.
Bangara-Chikadza, who teaches economics at University of Malawi in Zomba, said: “Going forward, the onset of the lean season threatens the price of maize, thereby exacerbating food inflation. Further, the renewed tensions in the Middle East threaten increase in fuel prices.”
Mzuzu University economics lecturer Christopher Mbukwa said: “With non-food inflation that is already rising, we may see headline inflation rising in the coming months”.Consumers Association of Malawi executive director John Kapito said he does not expect the benefits of the inflation decline to trickle down to consumers immediately.
In its 2026 Third Monetary Policy Statement, RBM acknowledged upside risks that could affect the current inflation trend.
Reads the statement in part: “Domestically, the possibility of El Niño weather conditions during the 2026/27 agricultural season is a key risk, given its potential impact on food availability.”
Similarly, Nico Asset Managers Limited Half-Year Economic Review for 2026 indicated that high inflation is one of the current key economic risks that could erode people’s purchasing power.
Maize, the country’s staple crop, remains central to the economy and accounts for about 53 percent of the Consumer Price Index, an aggregate basket of goods and services used for computing inflation.
