Rising geopolitical tension in the Middle East could push up headline inflation and affect economic growth prospects for Malawi this year, an economist expert has warned.
Already, the US-Israel-Iran war saw fuel pump price rising by 34 percent to K6,687 per litre weeks ago, due rising global oil prices emanating from low supply.
Economists say if it persists, the war could erode economic gains Malawi has registered in recent months including lowering headline inflation.
In a write up titled External shocks and Domestic Fragility: The Economic Impact of the 2026 Middle East Conflict on Malawi, the economist, Donasius Pathera said the war paints a murky outlook for the Malawi economy.
He said headline inflation, now at 23.8 percent, could rise to 35 percent within six months if the war persists, further eroding the purchasing power of low-income earners surviving.
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According to Pathera, gross domestic product growth—at 3.8 percent for 2026 by the government—could be as low as 0.5 percent, driven by reduced consumer spending, constrained production, and declining investment.
The projections further highlight that disruptions to Persian Gulf supply chains have raised global urea prices by 27 percent, forcing farmers to either cut fertilizer use—reducing maize yields—or pass higher costs to consumers, deepening food insecurity risks.
“Malawi must aggressively pursue energy diversification, moving away from total reliance on imported petroleum, while also strengthening domestic manufacturing and agricultural production to reduce the import dependency,” he said.
In a WhatsApp response, Minister of Finance Joseph Mwanamvekha said the government’s GDP growth and inflation projections were grounded both exogenous and endogenous factors.
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“The impact of the geopolitical tensions in the Middle East will depend on how long they will continue and if they end soon, all things being equal, then its impact may be limited and may not affect our projections that much,” Mwanamvekha said.
He said the government is already looking at all the scenarios and are making the necessary steps to avert its impact and ensure maintained and improved economic gains.
