The International Monetary Fund (IMF) says central banks across sub-Saharan Africa, including the Reserve Bank of Malawi (RBM), face a difficult balancing act between controlling inflation and supporting economic growth as the Middle East conflict fuels fresh price pressures.
In its April 2026 Regional Economic Outlook published on Friday, the IMF said rising fuel and commodity prices following the conflict are threatening price stability across the region.
The fund noted that for economies already battling high inflation, any delay in tightening policy could worsen the situation, adding that strong exchange rate pass-through, especially for countries with shallow foreign exchange markets, could quickly translate into higher domestic prices, worsening inflation pressures.
on the local market. | Nation
Reads the outlook in part: “Although central banks may be able to look through part of the supply shock, they should carefully monitor emerging exchange rate pressures and energy price pass-through to inflation and stand ready to tighten monetary policy, if needed, to keep inflation expectations well anchored.”
The RBM earlier conceded pressure on prices driven by persistent foreign exchange shortages and the effect of the 34 percent upward adjustments in fuel pump prices.
On April 1, Malawi Energy Regulatory Authority (Mera) raised petrol pump price to K6 672 per litre and diesel to K6 687, citing rising landed costs and in-transit expenses on the global market.
Consequently, the central bank revised upwards the 2026 annual inflation projection to 24.8 percent from the 28.4 percent last year due to persisting upside risks that undermine easing food Inflation.
In an interview, economist-cum-politician Dalitso Kabambe observed that efforts to control inflation through exchange rate management and borrowing have distorted markets, discouraged investment and deepened economic uncertainty.
The UTM Part president and former RBM governor, said as a result “economic recovery remains weak and exclusionary, worsening poverty and eroding welfare”, a situation that needs decisive reforms to restore policy coherence, stabilise markets and drive structural transformation.
Economics Association of Malawi president Bertha Bangara-Chikadza is on record as having said that a surge in fuel prices was likely to subject countries that rely on imports such as Malawi to inflationary pressures on essential goods, transport and manufacturing.
RBM spokesperson Boston Maliketi Banda is on record as having said to contain the expected inflationary pressures, the central bank is ready to deploy appropriate monetary policy tools, including liquidity management and maintaining appropriate interest rate stance
