The 2025 annual inflation rate stood at 28.4 percent, down by 3.8 percentage points from 32.2 percent in 2024 anchored by dropping food prices, which analysts project will continue this year.
This follows the second consecutive drop in inflation in December 2025 to 26 percent from 27.9 percent in November due to decelerating food inflation driven by easing maize prices, according to the National Statistical Office (NSO).
The NSO said in the statement: “The annual average year-on-year inflation rate for 2025 stood at 28.4 percent, down from 32.2 percent recorded in 2024.
“The annual average food inflation rate declined to 33.2 percent from 40.2 percent while non-food inflation averaged 20.7 percent, slightly lower than the 21.2 percent recorded in 2024.”
At 28.4 percent, the average annual inflation rate is also below the Reserve Bank of Malawi (RBM) projection of 28.9 percent revised in September last year.
In an interview yesterday, RBM spokesperson Boston Maliketi Banda described the drop in annual average inflation rate as inspiring and expressed the central bank’s commitment to sustain the momentum.
He said: “This development is encouraging indeed. We observe that the slowing down in inflation has largely been influenced by declining food prices.
“We see this disinflation process being sustained should food prices continue decreasing as expected.”
Meanwhile, RBM Deputy Governor for operations Kisu Simwaka has described the current trend as a sign that inflation has turned the corner, which could pave the way for a policy rate cut to support economic growth.
“What we want to see is inflation declining all the way to single digits. Encouragingly, the continued decline in inflation has opened the door to a possible policy rate reduction,” he said a writeup posted on his Facebook page.
Simwaka hinted at the likelihood of the Monetary Policy Committee (MPC) assessing progress based on inflation outcomes and outlook at its upcoming meeting to decide whether to reduce the policy rate or maintain it.
In its latest Market Intelligence Report, RBM has projected an optimistic inflation outlook for the near-term, noting that easing food prices have bolstered Malawi inflation’s resilience to external shocks.
In an interview on Wednesday, Economics Association of Malawi president Bertha Bangara-Chikadza, the University of Malawi economi said if the cautiously optimistic outlook were to materialise, it would signal that Malawi’s economy is beginning to withstand external shocks even in the midst of global uncertainty.
“Sustained easing in headline inflation, especially if it is supported by stable food prices, would improve macroeconomic stability which is critical on the road to recovery,” said the University of Malawi (Unima)economics lecturer.
In a separate interview, Unima associate professor of economics Gowokani Chijere Chirwa said if such projections materialise, it would be good news to the industry.
At its last meeting of 2025, the RBM MPC kept the policy rate at 26 percent due to inflationary pressures.
