Centre for Social Concern (CfSC) says household spending has increased by eight percent in December, forcing consumers to tighten spending for this year’s festive season.
CfSC data show that the national average cost of living increased sharply to K938 841 this month from K871 175 in November due to rising food taxes and increased value-added tax (VAT).
The rise came barely a month after household spending declined by nine percent in October to K871 175 from K945 029 in September on account of easing maize prices.
But the cost of living continues to vary across Malawi’s major cities, reflecting differences in transport costs, market access and local economic conditions.
The data show that during the month, Blantyre recorded the highest cost of living at about K1 072 809 followed by Lilongwe at K956 735 while Zomba had the lowest at K796 211.
In an interview on Tuesday, Blantyre-based Wilford Mphande said despite the pressure to spend on Christmas, rising cost of living has made him to be cautious.
He said: “In the past, I used to take all my family members to shop and host big parties, but now we will have to find a way to cut back on that so that we can survive the month ahead of us.”
Another shopper, Henry Nyirenda of Karonga said while it is obvious that they will patronise lake events, spending will be minimal.
“I have about K8 000 more deducted from my salary as pay as you earn [tax], but my family will still need to be fed, so cutting expenditure during this time is not an option, but a necessity.”
However, Lyness Mphande, a mother of three, said she had to sacrifice her village bank earnings, meant to cater for groceres in the first half of January, to shop for her children.
“I got K700 000 from the village bank and there is no way I am spending all of this on groceries, even though the demand is there. I have children that look up to me,” she said.
According to CfSC, a key driver of the rising cost of living is the escalating price of maize, Malawi’s staple food, which takes up 50 percent of household expenditure.
The data further show that in Mzuzu, the price of a 50 kilogramme (kg) bag of maize rose sharply from K57 500 to K64 000, representing one of the steepest increases recorded during the period.
Zomba also registered a rise from K61 750 to K62 225, while Blantyre, although unchanged, maintained the prie of K65 000 per 50kg bag.
In an interview on Tuesday, CfSC economic governance officer Agness Nyirongo said high food prices are closely linked to the rising cost of agricultural inputs, adding that the situation has been worsened by the increase in VAT rate from 16.5 percent to 17.5 percent, which has raised the cost of goods and services across the economy.
She said: “The VAT increase has had a cascading effect, increasing prices of basic necessities, transport and essential services.
“For households already struggling to meet basic needs, any additional tax burden has further reduced their real incomes.”
In the 2025/26 Mid-Year Budget Review Statement delivered in Parliament last month, Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha announced new tax measures.
Following the announcement, beginning April 1 next year, workers earning K170 000 or less will not be paying income tax following a change in the zero-rate band from K150 000.
The 25 percent tax band has been removed with incomes between K170 000 and K1.57 million now attracting 30 percent tax rate, those up to K10 million will be taxed at 35 percent and a new 40 percent tax rate applies beyond that threshold.
Mwanamvekha has defended new tax measures introduced in the 2025/26 Mid-Year Budget Review, saying they were adopted after careful consideration.
Meanwhile, Competition and Fair Trading Commission chief executive officer Lloyds Vincent Nkhoma has warned traders against engaging in unfair trading practices including, excessive pricing, misleading advertising and sale of substandard or unsafe products during the festive season.
