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MALAWI · ECONOMY
Key Facts
- —The country Malawi is a landlocked southern African nation of about 21 million people whose top export is tobacco. Its currency is the kwacha.
- —What happened On Monday 19 October, Malawi’s National Statistical Office reported that annual inflation slowed to 19.4% in September from 20.0% in August.
- —The milestone It is the first reading below 20% since May 2022, when inflation stood at 19.1%.
- —Food and non-food Food prices rose 12.5% on the year, down from 13.4%, while non-food prices rose 31.5%, down from 31.8%.
- —The central bank The Reserve Bank of Malawi forecasts inflation of 22% for 2026, against 28.4% in 2025 and 32.2% in 2024.
- —The budget gap The reading is 4.4 points above the 15% end-of-year inflation rate assumed in the 2026/27 national budget.
- —Still open Whether prices climb again as non-food prices, fuel shortages and a possible El Niño drought bite before the year ends.
Malawi inflation fell to 19.4% in September, the first time annual price growth has dropped below 20% since May 2022. The National Statistical Office, the government agency that compiles the country’s price data, reported the figure on Monday 19 October.
For US investors, aid donors and companies that trade with Malawi, slower price growth is welcome news in an economy short of dollars and fuel. Yet prices outside food are still rising at 31.5% a year, and economists warn the gains are fragile.
What the Statistics Office Reported
Malawi inflation, the rise in consumer prices over 12 months, slowed to 19.4% in September from 20.0% in August, according to the National Statistical Office. The last time the rate was lower was in May 2022, when it stood at 19.1%.
The average for the third quarter was 20%, against 28.1% in the same quarter of 2025, the Nation newspaper reported from the office’s data. The August figure was covered in an earlier Rio Times report, which put the rate at 20.01%.
The statistics office said the decline in Malawi inflation came mainly from easing food prices. Nation Online, a leading Malawian daily, carried the figures on Monday 19 October.
Food Prices Ease While Other Costs Stay High
Food inflation fell to 12.5% in September from 13.4% in August, according to the Nation. Maize, the staple grain that most Malawian households eat daily, has held steady in price.
Non-food inflation, the other half of Malawi inflation, covers fuel, transport, housing and imported goods, eased only slightly to 31.5% from 31.8%. Reserve Bank Deputy Governor Kisu Simwaka called non-food inflation sticky, linking it to past exchange-rate changes that raised import prices.
Mzuzu University lecturer Christopher Mbukwa said the Malawi inflation rate could rise in coming months if non-food inflation keeps climbing. John Kapito of the Consumers Association of Malawi said he does not expect lower inflation to reach households quickly.
The Central Bank and the Budget Target
The Reserve Bank of Malawi, the central bank led by Governor George Partridge, forecasts average inflation of 22% for 2026. That compares with 28.4% in 2025 and 32.2% in 2024, the Nation reported.
Simwaka said the September Malawi inflation reading fits the bank’s forecast and that inflation should stay in the teens in the fourth quarter. He added that the path down is volatile, with a possible El Niño drought a key risk to food supply.
The government’s 2026/27 national budget assumes inflation of 15% by the end of the year, the Nation reported on Monday evening. September’s 19.4% is 4.4 percentage points above that, so economists say reaching the target depends on containing non-food prices.
Fuel and Dollars Keep Pressure on Prices
Economists Edward Lemani and Patrick Chimseu said fuel, transport and imported inputs can feed back into food prices. Chimseu, of the Centre for Agriculture Research and Development, said Malawi inflation comes more from production costs than from strong consumer demand.
Fuel supply has been strained by a shortage of dollars to pay for imports, as an earlier Rio Times report described. The Transporters Association of Malawi expects about 287 fuel tankers in the week of Monday 19 October, from Dar es Salaam and Beira.
Fitina Khonje of the Malawi Energy Regulatory Authority, the state fuel regulator, called the foreign-exchange constraint a national issue. Reserve Bank data cited by the Nation show reserves of US$600.6 million in July, or 2.4 months of imports, below the recommended three.
What It Means for US Readers
Lower Malawi inflation eases pressure on households that US-funded food and health programmes try to reach, and helps firms pricing in kwacha. The United States is the largest shareholder of the International Monetary Fund, the lender whose support Malawi is now seeking.
An IMF team led by Justin Tyson ended a two-week Lilongwe visit on 6 October, as reported earlier, citing considerable progress toward a loan. Investors will watch whether a deal is signed and whether the kwacha weakens, since either would change the path of prices.
Malawi has had no IMF programme since May 2025, and its dollar shortage is explained in a Rio Times background report. Exporters of tobacco, tea and sugar earn the dollars that decide fuel supply, so any slip in inflation or reserves reaches buyers abroad.
What Is Not Known
No monthly price change for September has been reported, so it is not clear how fast prices rose between August and September. The date of the Reserve Bank’s next rate decision has not been announced.
It is open whether the government will devalue the kwacha as part of an IMF agreement, and when a loan could reach the board. Economists have not agreed whether inflation will end the year in the teens or climb back toward the Reserve Bank’s 22% average forecast.
More: Africa news in English, every day from The Rio Times.
Frequently Asked Questions
What is Malawi’s inflation rate?
Malawi’s annual inflation rate was 19.4% in September 2026, down from 20.0% in August. It is the first reading below 20% since May 2022.
Why did Malawi inflation fall in September?
The National Statistical Office said easing food prices drove the decline. Food inflation slowed to 12.5% from 13.4%, helped by steady maize prices.
Why is non-food inflation still so high?
Non-food prices rose 31.5% in September, with fuel, transport and imported goods leading. The Reserve Bank says past exchange-rate changes still feed into import prices.
Will Malawi meet its 15% inflation target?
The 2026/27 budget assumes inflation of 15% by the end of the year, but September stood 4.4 points higher. Economists say that depends on holding down non-food prices.
Why does Malawi inflation matter to US readers?
Malawi is seeking a new IMF loan, and the United States is the fund’s largest shareholder. Inflation, fuel and dollar supply also affect US aid programmes and companies trading with Malawi.
Sources: Nation Online, 19 October 2026; Nation Online, 19 October 2026; Nation Online, 19 October 2026; Nyasa Times, 19 October 2026.
Editorial responsibility: Matthias Camenzind, Editor-in-Chief · Editorial standards · Report an error
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