```html Malawians Struggle as Inflation Soars, Leaving Families With Impossible Choices Families in Malawi are facing increasingly dire circumstances as soaring inflation erodes their purchasing power, forcing them to make heartbreaking choices to survive. With prices of essential goods rising sharply while wages stagnate, many are struggling to afford basic necessities like food, soap, and school fees.

'I Tell My Children Not to Play': The Reality of Hyperinflation Suzanna Kathumba, a domestic worker in Lilongwe, Malawi, exemplifies the daily struggles of many. Earning just 80,000 kwacha ($46; £34) a month, she is the sole provider for her four children. The rising cost of living has forced her to implement drastic measures. "I've told my youngest children not to get too dirty when playing so we can save on soap," Ms. Kathumba told the BBC. "But it's hard because children are children, they want to play."

Malawi Grapples With One of Africa's Highest Inflation Rates In May, Malawi's annual inflation rate stood at 27.7%, a slight decrease from 29.2% in April, but still among the highest in Africa. This hyperinflationary environment, identified in a recent Ernst & Young report, is characterized by a cumulative inflation rate exceeding 100% over three years. The report highlighted Malawi, alongside countries like Burundi, Sierra Leone, Sudan, Venezuela and Zimbabwe, as facing this severe economic challenge. The International Monetary Fund (IMF) data suggests Malawi had a three-year cumulative inflation rate of 116% as of December 2024, with projections of 102% for 2025 and 66% for 2026. World Bank data further reveals that approximately 70% of Malawi's population lives on less than $2.15 a day, compounding the impact of inflation.

The Forex Crisis: A Key Driver of Inflation Economists attribute Malawi's inflation woes, in part, to a critical shortage of foreign exchange (forex) reserves. This scarcity hinders the country's ability to import essential goods. Dr. Bertha Bangara Chikadza, a senior lecturer in macroeconomics at the University of Malawi and president of the Economics Association of Malawi, explains the structural imbalance: "We are not exporting high-value products. We export products like maize, soya beans and sugar, but import expensive products such as fertilisers, medicine and furniture, so we need a huge amount of forex for this." Businesses struggle to secure forex from banks, forcing them to turn to the black market, where exchange rates are significantly higher, further driving up prices for consumers. Mohammed Hanif Waka, a stationery shop owner in Lilongwe, describes the impact on his business: "Sales have drastically dropped. We have had to make redundancies."

Historical Context and Current Challenges Malawi's economic vulnerabilities are rooted in its history as a predominantly agricultural economy heavily reliant on rain-fed agriculture. This dependence makes it susceptible to climate shocks, impacting crop yields and export earnings. Furthermore, limited diversification in the economy and a reliance on imported goods have exacerbated the forex shortage and inflationary pressures. The suspension of a $175 million loan agreement with the IMF earlier this year has added to the economic uncertainty. While the IMF cited "fiscal discipline" challenges, Malawi's Finance Minister Simplex Chithyola Banda stated the suspension was a government decision due to disagreements over loan terms, particularly concerning fuel price adjustments.

Government Response and Future Outlook The Malawian government is under increasing pressure to address the cost-of-living crisis, especially with national elections scheduled for September. Trade Minister Vitumbiko Mumba acknowledges the forex rationing but accuses traders of price gouging. He announced plans for an "economic sabotage bill" and an "essential goods and services bill" to regulate prices. However, the opposition blames the government for the economic mismanagement. The cost of living is expected to be a major campaign issue, with citizens desperately hoping for solutions that will bring stability to the economy. As Ms. Kathumba poignantly states, "We depend on the government for assistance. I hope the politicians remember the less privileged Malawians when making their decisions."

Expert Analysis: A Need for Diversification and Structural Reforms According to Dr. John Tembo, an independent economic analyst based in Blantyre, Malawi's long-term economic stability requires fundamental structural reforms. "Addressing the forex shortage necessitates diversifying the export base, investing in value-added industries, and promoting sustainable agriculture practices," he argues. "Furthermore, strengthening governance, combating corruption, and improving public financial management are crucial for building investor confidence and attracting foreign investment." He also highlights the importance of social safety nets to protect the most vulnerable populations from the impact of economic shocks. Additional reporting by Jack McBrams in Lilongwe. ```