IMF Staff Concludes Mission in Malawi

The International Monetary Fund (IMF) team recently visited Lilongwe to discuss economic and financial developments in Malawi. The team, led by Ms. Mika Saito, engaged in productive discussions with Malawian authorities regarding policies to support the completion of the First Review under the Extended Credit Facility (ECF) Arrangement.

During the visit, both parties made substantial progress in reaching a common understanding on the necessary reforms to return to a sustainable fiscal path, rebuild external buffers, restore debt sustainability, and mitigate the impact of the El Nino-induced disaster. The IMF team acknowledged the Malawian authorities’ commitment to successfully completing the first review of the ECF-supported program.

Despite weather-related shocks impacting the economy and exacerbating food insecurity, the economic outlook for 2024 remains positive. However, economic growth is projected at 2 percent due to the impact of El Nino on agricultural production. A successful winter crop is crucial to cushion the effects of drought on the agriculture sector.

The IMF team emphasized the importance of fiscal discipline, rebuilding international reserve buffers, normalizing the foreign exchange market, addressing governance weaknesses, and implementing successful external debt restructuring for macroeconomic stability. Discussions will continue in the coming weeks towards the completion of the First ECF Review.

Overall, the IMF team expressed gratitude to the Malawian authorities and other counterparts for their cooperation, warm hospitality, and constructive discussions. The ongoing collaboration between the IMF and Malawi highlights the commitment to achieving economic stability and growth in the region.