The Reserve Bank of Malawi (RBM) says the increasing threat of rising non-food inflation could dampen the country’s inflation outlook despite easing food inflation which usually drives up prices.
In its latest Market Intelligence Report, RBM observed that the 33.4 percent October 1 fuel pump price hike has exerted heightened pressure on prices of non-food items.
For instance, while food inflation rate was more than double non-food inflation rate in January this year at 36 percent against 16.9 percent, food inflation has eased to 32.4 percent while non-food inflation has jumped to 23.8 percent.
Reads part of the RBM report: “Overall, global, regional and domestic developments indicate a complex inflation environment shaped by mixed external conditions and persistent internal cost-push pressures.
“Although disinflation in some economies provides limited relief, rising domestic non-food inflation driven mainly by fuel price adjustments, continues to influence the inflation outlook.”
The RBM said the domestic fuel pump price adjustments have amplified inflation pressures despite easing food inflation.
“These dynamics underscore an inflation landscape influenced by both external trends and domestic factors, with cost-push pressures remaining a key feature of the period under review,” reads the report.
The RBM’s projection comes after the inflation rate moved to 29.1 percent in October from 28.7 percent in September 2025, driven by persisting pressure of non-food prices.
The drop in food inflation rate comes at a time maize prices have started easing since September 2025 with latest data from the International Food Policy Research Institute indicating that maize prices declined by six percent in November from K1 238 per kilogramme (kg) to K1 168 per kg.
In a Facebook post, RBM deputy governor for economics and regulation Kisu Simwaka expressed worry over consistently high inflation, saying “inflation has remained stubbornly high, above 20 percent over the last three years driven by both supply and demand factors”.
He said the situation calls for continued tight monetary policy stance and aligning fiscal policy with monetary policy efforts by investing in irrigation, among others.
Meanwhile, economic analysts say although non-food inflation rate remains relatively low, foreign exchange scarcity-induced fuel shortages still exert pressure on transport costs.
Speaking in an interview on Sunday, Economics Association of Malawi president Bertha Bangara-Chikadza said while the country’s underlying inflationary pressures come from the food aspect, the non-food inflation rate should also be considered and be controlled.
“While non-food inflation rate has remained relatively stable, the persistently high headline inflation trends suggest that the country must address the underlying food pressures,” she said.
Bangara-Chikadza, who teaches economics at the University of Malawi, said a critical intervention for long-term stability is to strengthen winter cropping initiatives.
In a separate interview, Centre for Social Concern programme officer for economic governance Agnes Nyirongo observed that although food inflation is stable, transport costs have been volatile because of foreign exchange scarcity, thereby stifling business growth.
She said: “High inflation is not only squeezing households, but it is also stifling business growth.
“Rising production and transport costs are being passed on to consumers, further fuelling inflation in a vicious cycle.”
Business Partners International country manager Bond Mtembezeka said in an interview on Sunday that it is still possible to reduce inflation in the medium-term provided monetary policy remains tight and food supply is improved.
The Monetary Policy Committee of the RBM maintained at 26 percent the policy rate, the rate at which commercial banks borrow from the central bank as lender of last resort, leaving commercial banks’ lending rates at as high as 37 percent due to inflationary pressures.
