Ecama expects ‘modest’ improvement in 2025
Economists and industry players expect modest improvement of the economic environment in 2025 due to easing inflation but stressed fiscal prudence will be key for that to materialise.
The experts, while noting that most hardships of 2024 will spillover in 2025, expect some economic expansion due to anticipated easing of inflation and election-related economic activities, among others.

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Economics Association of Malawi (Ecama) president Bertha Bangara-Chikadza said, for instance, inflation will ease from 32 percent to 24.2 percent in 2025 but stressed that fiscal policy actions remain key to achieve stability.
Chikadza said: “Malawi’s economic environment in 2025 is expected to show modest improvement, driven by election-related activities that will spur demand and improve agricultural output from favourable weather conditions.
“Inflation is projected to decline from 32 percent in 2024 to 24.2 percent in 2025, potentially leading to lower interest rates and increased private-sector credit access, which could stimulate investment and consumption.”
However, according to Ecama, challenges such as fiscal deficits, high but easing inflation, execution risks in monetary and fiscal policies and external factors like global economic conditions could constrain progress.
“While the outlook is cautiously optimistic, achieving sustainable growth will require fiscal discipline, agricultural resilience, and enhanced private-sector participation,” she said.
When asked on the factors behind the projected ‘modest improvement’ of the economy apart from treasury fiscal discipline, Chikadza pointed out increased productivity from mega farms and anticipated drop of interest rates.
“Lowering interest rates as inflation eases will support private-sector growth by improving access to credit and stimulating investment. Additionally, fostering economic diversification and strengthening governance in public finance management will be crucial for sustainable recovery.
“Agricultural productivity must be boosted by leveraging Mega Farms investments including irrigation investments and promoting climate-smart farming,” she said.
In a separate interview, chamber for small and medium businesses association executive secretary James Chiutsi stressed the need for credit access to enable small and medium enterprises (SMEs) to afford capital.
He said: “We need serious intervention in developing the SME industrial sector by establishing a development bank that fully supports the small-scale industrial sector, and incentives on importation of productive machinery.
According to Chiutsi, authorities must come up with protective policies on importation of simple products that can be produced locally while coming up with initiatives aimed at enhancing skills in SMEs.
During the ongoing budget consultations which Minister of Finance and Economic Affairs Simplex Chithyola-Banda opened this week, stakeholders stressed the need to align fiscal policies with the Malawi 2063 blueprint and its first 10-year implementation plan.
In an interview later, Chithyola-Banda pledged reforms to address gaps in the forthcoming budget.
“We need to move from predominantly basing our budget on consumption to investment because it is only when we produce more that we can get more in terms of forex and tax.
“So far, there are several areas of production such as mining, carbon credit markets, labour export and diaspora investment that we will need to explore as potential sources of revenue,” he said.
In 2024, the country’s economy is estimated to have grown by 1.8 percent while initial projections for 2025 stand at 4 percent.
Chithyola-Banda is expected to present the 2025/26 National Budget during the 51st Session of Parliament set to open on February 14 2025.