The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) says while the easing of headline inflation provides some breathing space, the rise in non-food inflation signals cost pressures embedded in the economy.
In its inflation bulletin published on Saturday, MCCCI noted that the divergence between declining food inflation and rising non-food inflation suggests that inflationary pressures are becoming more cost-driven in services and utilities rather than purely supply-driven in food markets.
Reads the bulletin in part: “If transport, communication and utility costs remain high, they could continue feeding into production and distribution costs, limiting the pace of overall disinflation in the coming months.
“Therefore, the near-term outlook is moderate, but still elevated inflation, continued pressure from utility, transport and service-related costs and potential stability as harvest season approaches.”
The private sector lobby group has since asked businesses to operate under a cautiously optimistic, but risk-aware environment, focusing on resilience, efficiency and strategic pricing rather than aggressive expansion in the short-term.
While headline inflation eased to 24.9 percent in January 2026 from 26 percent in December 2025, according to National Statistical Office, the improvement was largely driven by a decline in food prices rather than a broad-based easing of cost pressures.
MCCCI data show that housing, water and electricity inflation rose to 30 percent in January from 26 percent in December, reflecting higher utility tariffs and housing costs.
Transport inflation also surged sharply to 38 percent from 21 percent following a 41 percent increase in fuel prices in January, raising concerns about higher logistics and distribution costs for businesses.
Communication costs, on the other hand, jumped to 23 percent from nine percent while furnishings and household equipment remained elevated at 36 percent, highlighting the persistent rise in the cost of goods and services outside the food category, according to the bulletin.
In an interview, Consumers Association of Malawi executive director John Kapito said that most of the goods whose prices are rising under non-food are basic needs, which cannot be replaced.
He said this is also “giving economic pressure on consumers’ welfare”.
Mzuzu University economics lecturer Christopher Mbukwa warned that non-food inflation is expected to rise owing to the rise in fuel, electricity and value-added tax-related costs.
“The relief is only on the front of the reduced maize prices or food inflation for the average consumer, but the general cost of living is likely to remain unchanged and even worse if there will be no cushions,” he said.
Last week, the Monetary Policy Committee chaired by Reserve Bank of Malawi Governor George Partridge cut the policy rate, the rate at which commercial banks borrow from the central bank, from 26 to 24 percent following a drop in headline inflation to 24.9 percent in January 2026 from 27.7 percent in the last quarter of 2025 and 29.2 percent a year earlier.
Partridge said in the statement that while the policy rate cut reflects improving inflation outlook, increasing prices of non-food items, which pushed up non-food inflation reflect higher production and import costs rather than strong demand in the economy.
