Malawian consumers and producers will have to battle escalating prices in the short to medium-term as projections by EY Global show that the local economy alongside 15 others remains in hyperinflation.
The May 2025 forecast by EY, a multinational professional services firm, comes after projections by auditing and business advisory firm PwC in April last year and another projection by EY Global in October the same year that Malawi is in hyperinflation, implying that prices of goods and services will continue to rise uncontrollably.
In the latest forecast, EY Globl said Malawi, alongside Zimbabwe, Venezuela, Turkey, Suriname, Sudan, Sierra Leone, Lebanon, Islamic Republic of Iran, Lao P.D.R., Haiti, Burundi and Argentina remains hyperinflationary.
Reads the update in part: “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 Statistics Office (NSO) also reported three-year and 12-month cumulative rates of inflation of 118 percent and 30 percent, respectively as of March 2025.
“We believe that Malawi remains hyperinflationary,” reads the EY Global statement.
The figures, according to Centre for Social Concern economic governance officer Agnes Nyirongo, suggest that while inflation may ease slightly in the years ahead, it remains well above normal levels of 100 percent and continues to undermine the country’s economic stability.
She said: “Further forecasts remain troubling. The short-term and long-term inflation indicators both confirm what Malawians are experiencing first-hand: prices are skyrocketing and the kwacha’s purchasing power is evaporating.”
Such is the story for Blantyre-based Flossy Katsonga, a mother of five who sells rosaries.
She said: “The rising prices of goods has made it hard for me. Inputs for making rosaries continue to rise, giving me little margins of K300 per rosary sold and to manage with that, it is even more difficult.
“I have to help my husband in taking care of the home, but with the way things are, it is really difficult doing business and being a consumer.”
Meanwhile, due to declining maize prices, the average cost of living also declined by 0.5 percent to K841 219 in March 2025 for a family of six, according to CfSC data.
Malawi’s year-on-year headline inflation rate for March 2025 declined by 0.2 percentage points to 30.5 percent, according to published NSO.
Consumers Association of Malawi executive director John Kapito said in an interview yesterday that failure to balance production and consumption has continued to hurt the economy, with inflation remaining high.
Centre for Green Economy in Developing Countries global lead Velli Nyirongo observed that with hyperinflation, wages and savings fail to keep pace with price increases while businesses operate in an environment of uncertainty, as inflation makes it extremely difficult to plan or invest.
In an earlier statement, Institute of Chartered Accountants in Malawi said in hyperinflationary terms, the population prefers to keep its wealth in non-monetary assets or a relatively stable foreign currency.
It said the general population regards monetary amounts not in terms of the local currency, but in terms of a relatively stable foreign currency, which is not the case in Malawi.
Both the Reserve Bank of Malawi and Ministry of Finance and Economic Affairs expect inflation, which averaged 32.3 percent in 2024, to drop this year due to improved agricultural output.
