Malawi is seeing more money in circulation than ever before, and experts warn this could push prices even higher.
According to the Reserve Bank of Malawi (RBM), the total money supply in the economy--including bank deposits--jumped from 43.4 percent in July to 52.1 percent in August 2025, continuing a six-month trend. This surge is mostly because the government has been borrowing and spending a lot, which injects extra money into the economy.
University of Malawi lecturer Edward Leman explained that while more money can sometimes help businesses produce more goods, in Malawi supply is low, so the extra money mainly pushes up prices. In simple terms: too much money chasing too few goods = inflation.
Inflation in Malawi was already 28.2 percent in August 2025, meaning everyday goods are getting much more expensive. People and businesses are digging into savings to keep up with costs, which adds even more money into circulation and fuels the problem further.
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Finance expert Brian Kampanje noted that election-related spending earlier this year also contributed to this money surge. Economist Velli Nyirongo added that rural households and people with fixed incomes feel the pinch most, as their money buys less every day.
High inflation also means loan rates remain high, with some borrowers paying as much as 36 percent interest. RBM expects inflation to average 28.5 percent by the end of the year if production does not increase.
In short, Malawians are facing a cost-of-living crisis: wages and savings are losing value, prices are rising, and everyday life is becoming more expensive--unless government spending and production are carefully balanced.
This is a situation that affects everyone--from city markets to rural villages--making it harder for families to afford basic goods like food, fuel, and school supplies.
The message is clear: Malawi has too much money in circulation and not enough goods, and unless production catches up, prices will keep rising.
