The Economics Association of Malawi has warned that achieving Malawi’s projected average inflation rate of 22 percent in 2026 may prove difficult, with its Executive Director Esmie Kanyumbu citing persistent economic pressures and global uncertainties.
The warning comes as the Reserve Bank of Malawi maintains a tight monetary policy stance aimed at consolidating recent gains in slowing inflation.
The Monetary Policy Committee recently held the policy rate at 24 percent while also raising the Liquidity Reserve Requirement to absorb excess liquidity in the banking system and strengthen price stability.
Kanyumbu said the inflation outlook remains fragile, even with seasonal improvements in food supply during the ongoing harvest period, which has helped ease food prices.
“While the 22 percent target is possible, it is also highly challenging given prevailing risks and current inflation trends,” she said.
Official data shows inflation slowed to 24.3 percent in the first quarter of 2026, down from 27.7 percent in the previous quarter, largely driven by lower food prices.
However, non-food inflation continues to rise, driven by higher fuel costs, import-related pressures, and broader global market volatility affecting domestic prices.
At a Monetary Policy Technical Forum in Lilongwe, Esther Machado, Director of Financial Markets at the central bank, said the policy stance is intended to balance inflation control with borrowing costs.
“Maintaining the policy rate ensures inflation continues to slow down without unnecessarily increasing the cost of borrowing,” she said.
