Malawi’s government announced plans to reduce annual inflation below 21% this year, as the Southern African nation continues to battle rising prices and foreign exchange shortages.

Speaking in parliament on Friday, President Peter Mutharika outlined his administration’s economic priorities, aiming to lift growth to 3.8% in 2026 and 4.9% in 2027. He noted that his government inherited a slower 2.7% growth rate, reflecting years of economic strain.

Malawi has faced persistent inflation, which currently sits at 26% year-on-year, and has remained above 20% since mid-2022. The shortage of foreign currency has disrupted imports of key goods, including fuel and fertilizers, adding pressure on households and businesses.

To stabilize the economy, Mutharika said the government is negotiating a new support program with the International Monetary Fund, restructuring national debt, and working to rebuild international reserves. Currently, foreign exchange reserves cover less than three months of imports, below the widely recommended safety buffer.

Mutharika returned to power following a September election, campaigning on promises to revive Malawi’s economic fortunes. With general elections approaching in September, his administration faces the challenge of balancing growth targets with immediate economic pressures.