The year 2025 goes into the history books as another to forget for consumers in Malawi. From the ever rocking headline inflation, to continued erosion in buying power, local consumers feel the pinch. As BENADETTA CHIWANDA MIA writes, what a K2,000 could afford to buy as at January 2025 requires more than double the cost in December.
The Malawi economy persistently faced high inflation in 2025, with rising commodity prices eroding households’ purchasing power.
This has fuelled widespread concern over the rising cost of living—which bites, and bites harder.
Despite some fluctuations, albeit modest, during the year, headline inflation remained exchange shortages contributing to increased cost of imported goods like fuel and inputs such as fertilizer which averaged around K150,000 in the year, driving up transport and production costs for businesses.
These pressures have been passed on to consumers, increasing the general price level across both food and non-food baskets.
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To curb inflation, the Reserve Bank of Malawi maintained a tight monetary policy stance, with the policy rate held at 26 percent, one of the highest on the continent.
The cost of inflation on Malawians
The sustained high cost of living has had profound effects on households across Malawi.
As at November 2025, a household of six required an income of about K974,000 to afford basic needs. An astronomical figure that the majority of the population cannot afford.
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With food prices outpacing wage growth, many families are forced to spend a major share of their income on basic staples, leaving less for other basic necessities like healthcare, education, and savings.
In some cases, this has pushed v u l n e r a b l e households into deeper poverty and heightened food insecurity, particularly during lean seasons.
According to FewsNet’s October 2025 Outlook, acute food insecurity remained a critical concern in many parts of the country, partly due to the combination of elevated food prices and low agricultural productivity.
In the October outlook FewsNet estimated that between 2 to 2.49 million people will require humanitarian food assistance during the upcoming January to March 2026 lean season, highlighting the persisting food insecurity situation.
The rising cost of living has also echoed through the economy, with firms reporting higher input costs and tighter profit margins, except for financial institutions whose profitability remained strong.
Small and medium-sized enterprises on the other hand, which are critical for employment, cited expensive credit conditions and weak demand as significant challenges.
Economic hardships characterised by high inflation, fuel shortages and rising cost of living were widely cited as a key voter concern, influencing political debates during the campaign.
In the Mid- Year budget statement, Minister of Finance Joseph Mwanamvekha projected annual inflation to average 28.5 percent in 2025, slightly below the IMF projections, and a decline from 2024’s annual average of 32.3 percent. The government is also optimistic of a further annual inflation decline to 20.7 percent in 2026.
While this gives some hope of easing inflationary pressure in the short term, it is left to be seen whether this will materialise.
However, as it stands, inflationary pressure still bites, eroding their purchasing power and increasing the cost of doing business.
