Malawi’s state of economy is unfortunately not going as expected, says the International Monetary Fund (IMF) upon concluding its most recent mission to the country on Wednesday, May 23, 2024, in Lilongwe.
A team from IMF, led by Ms Mika Saito, held discussions with the Malawi government officials in Lilongwe aimed at reviewing the First Extended Credit Facility (ECF)-supported program from May 12 to 23, 2024.
With growth at 2%, Malawi’s positive economic prospects for 2024, IMF reports that serious challenges to Malawi’s economy persist.
The IMF states this is due to weather-related shocks, particularly those affecting Malawi’s agricultural production and food security.
Ms Saito emphasized mutual understanding between IMF and Malawian authorities on the necessary policies and reforms to steer the country’s economy towards revival.
Efforts to bolster international reserves and stabilize the foreign exchange market were, at the 11-day discussions, deemed crucial for Malawi’s economy to reduce vulnerability to external shocks.
Ms. Saito also underscored the importance of a successful winter crop to mitigate the impact of drought on the agriculture sector.
Acknowledging Malawi’s commitment to the ECF-supported program, the IMF team stressed the importance of fiscal discipline amidst spending pressures.
Also, Ms. Saito highlighted the significance of addressing governance and institutional weaknesses and the necessity of successful external debt restructuring for macroeconomic stability.
Looking ahead, discussions are set to continue in the following weeks towards the completion of the First ECF Review.
The outcome of these discussions holds implications for Malawi’s economic trajectory and its ability to navigate challenges while striving for sustainable growth and stability.
