Malawi’s Inflation Rate Eases to 27.1% in June 2025 but cost of living remains high

BLANTYRE-(MaraviPost)-Malawi’s headline inflation rate has eased to 27.1% in June 2025, down from 27.7% in May, according to the National Statistical Office.

This decrease is attributed to a decline in food inflation, which dropped to 31.6% from 32.7% in May.

The Reserve Bank of Malawi is projecting an annual inflation rate of 27% for this year, a significant decrease from 32% last year.

This projection is largely due to improved agricultural productivity and other factors.

The decline in inflation is a positive development, and economists have varying projections for Malawi’s inflation outlook in 2025. Some predict a range of 15.3% to 28.3%, citing concerns over election-related spending and food prices.

The World Bank projects that inflation will average 27.3% in 2025, attributing the projected improvement to expected declines in food prices.

The International Monetary Fund (IMF) predicts an average inflation rate of 15.3% in 2025.

Despite the projected decline in inflation, Malawi’s economy continues to face significant challenges.

The budget deficit is expected to remain high in FY2025/26, driven by election year spending and the need to absorb critical expenditures previously financed by bilateral support.

Continued foreign exchange shortages are impeding the importation of production inputs, affecting economic growth.

Climate-related disasters and failure to address external imbalances may further perpetuate input shortages and affect economic stability.

Overall, while the decline in inflation is a positive development, Malawi’s economy still faces significant challenges that need to be addressed to achieve sustainable economic growth and stability.