WORLD BANK WARNS MALAWI GROWTH REMAINS UNDER PRESSURE

The World Bank has projected Malawi’s economic growth at 2.7 percent in 2026, warning that persistent inflation, foreign exchange challenges, unreliable energy supply and a difficult business environment continue to weigh on the country’s economic recovery.

The concerns were raised on Thursday in Lilongwe during the launch of the latest Malawi Economic Monitor, titled Building Stability to Unlock Growth.

The report, however, also noted improvements in public financial management, saying government had managed to execute the 2026/27 national budget within approved limits for the first time in more than five years.

According to the World Bank, Malawi’s primary fiscal deficit has fallen from 3.7 percent to 0.4 percent of GDP, while the overall deficit has narrowed to 8.8 percent.

World Bank Division Director Firas Raad said the progress demonstrated improvements in fiscal discipline, but cautioned that the gains had yet to translate into significant improvements in the livelihoods of ordinary Malawians.

Raad said economic growth remained constrained by several challenges, including inflation, foreign exchange distortions, unreliable electricity supply and a difficult environment for businesses.

The report also indicates that Malawi’s overall poverty rate has declined from 50.7 percent to 47.3 percent. However, food poverty has increased from 20 percent to 24 percent, while inequality has also widened.

Meanwhile, Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha said government would not pursue currency devaluation as part of its economic reform programme.

Mwanamvekha said Malawi was engaging the International Monetary Fund and the World Bank on reforms that would be properly sequenced and designed to protect vulnerable people.

The Minister’s remarks come as an IMF mission is in Malawi for policy discussions on a possible new funding arrangement.

Government and its development partners are therefore expected to focus on measures aimed at strengthening economic stability while addressing the challenges affecting businesses, households and employment.

The latest Malawi Economic Monitor provides an assessment of the country’s economic performance and the reforms required to support sustainable growth.