Malawi’s inflation rate has fallen for a third consecutive month, hitting 27.7 percent in May, with the Reserve Bank of Malawi (RBM) suggesting that the rate has passed its peak.
But economists and a consumer rights activist think the rate remains high and unlikely to have an instant impact on interest rates, urging authorities to implement measures that could ensure that the ease in prices filters down to consumers.
The May inflation rate, according to the National Statistical Office Stats Flash, dropped by 1.5 percentage points from 29.2 percent in April due to continued deceleration of food inflation, which contributes more to the country’s general inflation.
Reads the NSO Stats Flash: “Food inflation now stands at 32.7 percent from 35.8 percent observed in April 2025 while non-food inflation is at 20 percent from 19.4 percent over the same period.
“The urban month-to-month inflation rate is at 0.6 percent while urban food and non-food inflation rates stand at 0.4 percent and 0.9 percent, respectively.”
It further said the rural month-to-month inflation rate is at 0.5 percent while the rural food and non-food inflation rates stand at 0.1 percent and 1.3 percent, respectively.
Writing on his Facebook page, RBM Deputy Governor Kisu Simwaka said inflation continues to decline, benefiting from lower food prices, on the back of improved food availability, following the harvest.
He said: “On the policy front, the continued decline in inflation is opening the door for possible interest rate reduction in the coming months.
“Looking ahead, inflation is expected to decline further, supported by increased availability of food although the rate at which food prices will decline is uncertain because of the difficult regional food situation.”
But Simwaka said in general, the path to single digit inflation will likely be long, with some bumps
In an interview yesterday, Economics Association of Malawi president Bertha Bangara-Chikadza, while describing the development as positive, thinks the rate remains high to make any immediate impact on interest rates, hovering at over 30 percent.
“When inflation drops, central banks usually respond by reducing the monetary policy rate, which in turn results in a drop in other rates in the financial markets, generally making the cost of borrowing lower than before,” she said.
Bangara-Chikadza observed that the easing inflation will likely be temporary, especially if maize supply alternatives are not put in place as the country moves out of the harvesting season.
Consumers Association of Malawi executive director John Kapito yesterday described the development as welcome, but stressed that the easing in inflation should translate into actual benefits consumers experience in their day-to-day activities.
“This can be reduced further as long as we can continue to be disciplined and prudent in our expenditures, including borrowing which affects all gains being made now,” he said.
Capital market analyst and economist Cosmas Chigwe said yesterday that although inflation pressure is easing, it will remain elevated in 2025 because of the macroeconomic realities Malawi faces.
In its monthly economic report, Nico Asset Managers Limited noted that despite the drop in inflation, the pressure on the prices will remain significant in 2025 mainly due to high government spending in relation to the coming election.
RBM has projected that annual inflaiton will be at 27 percent this year from 32.2 percent in 2024.
