Malawi's manufacturing and broader industrial sectors are showing signs of recovery. The Ministry of Finance, Economic Planning and Decentralisation projects the manufacturing sector to grow by 2.5 percent in 2026, up from 1.8 percent in 2025, according to the 2026 Annual Economic Report detailed by Nyasa Times. This growth falls under the government's Agriculture, Tourism, Mining and Manufacturing strategy, which has received a K1.334 trillion allocation in the 2026/2027 National Budget. The report notes that mining is expected to expand by 5.9 percent, focusing on rare earth elements, graphite and uranium, while tourism is projected to grow by 5.3 percent this year.
Building on earlier projections of a 2.8 percent agricultural growth rate for 2026, the anticipated industrial expansion will rely heavily on the farming sector to supply raw materials for local factories such as food and beverage processors. According to Nyasa Times, the recovery is being driven by major export crops including tobacco, sugar and tea, which provide essential inputs for value addition.
Update: Following its recent decision to hold the policy rate at 24 percent, the Reserve Bank of Malawi (RBM) has formally projected inflation to drop to 24.8 percent this year from 28 percent in the previous financial year. Speaking at a Monetary Policy Technical Forum in Lilongwe, RBM Director of Financial Markets Esther Matchado attributed the expected slowdown to improved agricultural output and stable food supplies, reports Nyasa Times. The central bank also kept the Liquidity Reserve Requirement at 10 percent for local currency deposits to maintain financial stability.
Reacting to the monetary policy decisions, Economics Association of Malawi Executive Director Dr. Esmie Kanyumbu welcomed the central bank's stance but warned that global shocks, particularly escalating conflicts in the Middle East, could still disrupt commodity markets and trigger fresh price increases, Nyasa Times reports.