Publication: Malawi Economic Monitor, July 2024: Reforming with Urgency - Malawi's Path to Economic Stability
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2024-07-23
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2024-07-23
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Economic growth in Malawi fell short of expectations in 2023 and is projected to remain subdued in 2024. While implementation of planned macroeconomic and structural reforms is expected to boost Gross Domestic Product (GDP) growth over the medium term, an El Niño-induced drought has worsened the near-term growth outlook. Addressing Malawi’s difficult economic situation requires a combination of immediate emergency-response efforts and the implementation of structural reform. However, downside risks continue to dominate the outlook. The impact of climate-related shocks during the current El Niño year could be larger than anticipated, while fiscal slippages, delays in debt restructuring, or the slow implementation of public financial management reforms could further increase macro-fiscal instability. The continued lack of foreign-exchange availability could result in shortages of critical imports, which would reduce economic activity. At the end of 2023, the government reached an agreement with the IMF on a four-year program under the Extended Credit Facility (ECF), and the resumption of budget support from the World Bank and African Development Bank will support important reforms designed to accelerate long-term growth. These achievements have bolstered confidence in the reform process, but success is far from assured. Rebalancing the economy and enabling faster, more inclusive growth, while strengthening resilience against shocks will require accelerating reform efforts. This nineteenth edition of the Malawi Economic Monitor (MEM) outlines urgent policy measures required to stabilize the economy, protect vulnerable households, and enhance long-term growth.
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“World Bank. 2024. Malawi Economic Monitor, July 2024: Reforming with Urgency - Malawi's Path to Economic Stability. © World Bank. http://hdl.handle.net/10986/41931 License: CC BY-NC 3.0 IGO.”
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