Chief Economist at Don Consultancy Group, Chifi Mhango, attributed the decline mainly to falling food inflation, supported by improved output conditions that have helped stabilise the food component of the consumer basket.

Food inflation dropped sharply from 37.7% in March 2025 to 20% in March 2026, Mhango said, describing the shift as a key driver behind the broader inflation slowdown.

Policy settings have also contributed. Mhango said fiscal restraint has been evident since September, with government expenditure “highly contained” as part of austerity-type measures aimed at stabilising domestic demand.

On the monetary side, Mhango pointed to a recent reduction in the policy lending rate by the Reserve Bank of Malawi. In February, the interest rate was reduced from 26% to 24%, signalling a more stable policy environment as inflation pressures eased.

However, risks remain. Mhango warned that non-food inflation has moved in the opposite direction, rising from 19.2% last year to 30.7%, driven by fuel-related pressures, transport costs, plus utilities. The trend suggests that imported inflation and energy-linked costs continue to feed through to household expenses even as food prices moderate.

Foreign exchange conditions remain a central factor in the outlook. Mhango said Malawi’s high dependence on imports increases exposure to external shocks, with foreign exchange scarcity capable of quickly transmitting into the inflation basket. Mhango said Reserve Bank management of the foreign exchange environment has supported stability, but continued monitoring remains necessary given the scale of import reliance.

The inflation slowdown provides some relief for households and policymakers, but the balance of pressures indicates that the inflation path remains sensitive to global fuel dynamics and domestic cost drivers outside food.

–ChannelAfrica–