Update: The International Monetary Fund has concluded a staff visit to Malawi without reaching an agreement on a new Extended Credit Facility lending programme, according to CNBC Africa. The discussions focused on fiscal discipline, debt sustainability, and foreign exchange management. Meanwhile, Finance Minister Joseph Mwanamvekha ruled out another immediate currency devaluation. The Malawi Freedom Network reports that Mwanamvekha said a further devaluation would only increase poverty after the painful lessons of previous currency adjustments.
In a move to lower transportation and production costs, the Malawi Energy Regulatory Authority reduced pump prices for petrol, diesel, and kerosene. Nyasa Times reports that the downward adjustment was triggered after the in-bond landed costs for petroleum products fell beyond the five percent threshold. The regulator directed retailers nationwide to apply the new maximum prices immediately, though it warned that Middle East geopolitical tensions could still influence future supply chain costs.
While the country's year-on-year inflation rate eased slightly to 23.4 percent in May down from 24.3 percent in April, economic observers caution that living costs remain severe. A Nyasa Times analysis notes that the drop was largely driven by a slowdown in food inflation to 17.6 percent, but non-food inflation stands at a high 33 percent. Businesses continue to struggle with importing and restocking essential goods due to the weakened kwacha and a chronic shortage of foreign exchange.
On the trade front, the European Union has promised expanded market access for Malawian exports under the Everything But Arms initiative. According to AMECEA News, EU Ambassador Daniel Aristi Gaztelumendi said the arrangement provides duty-free and quota-free access to the EU Single Market for all products except arms. He noted that ongoing EU support is specifically targeting the production and value addition of premium Malawian coffee to increase the country's foreign exchange earnings.