By Twink Jones Gadama
Malawi’s inflation rate has edged up to 28.5% in January 2025, marking a slight increase from the 28.1% recorded in December, according to the latest figures from the Reserve Bank of Malawi.
This marginal rise, driven primarily by a surge in food prices, has interrupted the downward trend in inflation observed in recent months.
The increase was largely driven by a spike in food prices, which interrupted the disinflation process that had been observed in recent months.
Inflation had fallen from a peak of 34.3% in September 2024 to 27% in November, reflecting base effects advantage arising from higher prices in the corresponding period in 2023.
However, Dr. Simwaka noted that the current increase in inflation is expected to be temporary, and that the outlook for inflation is becoming more favourable with prospects of a better crop harvest.
Food prices are expected to stabilise or reverse as more food becomes available to the market upon harvest.
Despite this, the persistently wide current account deficit, driven by a higher import bill, remains a threat to the general stability of prices.
The Reserve Bank of Malawi has emphasized the importance of restoring price stability, which is paramount to a healthy economy and particularly to protect the most vulnerable.
“As such, we attach an important priority to quickly bring inflation back to single digits in a timely manner,” Dr. Simwaka said. “Once inflation comes down, there will be space to reduce interest rates.”
The Reserve Bank of Malawi has mandated itself to promote price stability, and is working to ensure that the economy works for everyone.
With the expected improvement in food prices and the Bank’s efforts to manage inflation, Malawians can look forward to a more stable economic environment in the coming months.
