Africa-Press – Malawi. The International Monetary Fund (IMF) has urged Malawi and other African countries to strengthen their resilience to economic shocks beyond building financial buffers, as disruptions to global recovery persist.
In its latest Regional Economic Outlook for sub-Saharan Africa released on Tuesday, the IMF observed that the region’s economic recovery has been overtaken by recent shocks and growing macroeconomic imbalances.
The report states that more than half of sub-Saharan African countries are facing varying economic imbalances, citing issues such as primary deficits below debt-stabilising levels, foreign reserves covering less than three months of imports, overvalued exchange rates, double-digit inflation, and high interest-to-revenue ratios exceeding 20 percent.
Due to these mounting vulnerabilities, the IMF has revised the region’s growth forecast downward to 3.8 percent in 2025 and 4.2 percent in 2026—reductions of 0.4 and 0.2 percentage points, respectively.
The fund attributes the slowdown to turbulent global conditions, including reduced external demand, falling commodity prices, and tightening financial markets.
“Although market access improved in 2024, debt is still elevated for many countries, borrowing costs have increased, and global financial conditions are tightening,” the report warns.
Countries such as Malawi, Zimbabwe, the Republic of Congo, and Comoros have been specifically urged to avoid accumulating payment arrears, which the IMF says “can only increase the cost of public service delivery and reduce the credibility of fiscal policy.”
The regional report was released just days after the IMF downgraded its global growth projections to 2.8 percent for 2025 and 3 percent for 2026—down from 3.3 percent projected in January 2025—citing rising trade tensions and heightened policy uncertainty.
Secretary to the Treasury Betchani Tcheleni said Malawi remains committed to its economic diversification and self-reliance agenda to reduce its vulnerability to both internal and external shocks.
Tcheleni noted that while climate-related shocks have weighed heavily on Malawi’s growth, a recovery is expected, driven by increased mining activity and diversification efforts.
“We are expecting inflation to ease as food production has been relatively better this year compared to the past two years. There are also other efforts which are likely to significantly improve the balance of payments in the coming days, these will lower inflation and improve our macroeconomic environment,” he added.
The IMF projects Malawi’s economy to grow by 3.5 percent in 2025—slightly above the government’s forecast of 3.4 percent in the 2025/26 National Budget.
Despite the cautious optimism, Malawi faces several economic hurdles such as elevated inflation at 30.7 percent, a ballooning public debt at over K16 trillion as of September 2024, and access to international development assistance remains constrained.
Additionally, the country’s food security outlook remains fragile, with the second-round crop estimates projecting maize production at 2.96 million metric tonnes—below the national requirement of 3.5 million metric tonnes.
Experts warn the deficit could keep food prices high.
Economics Association of Malawi President Bertha Chikadza also emphasized the need for deeper structural reforms.
“In a dimming global outlook, Malawi’s resilience will largely depend on sound fiscal management, strategic investment, and reforms that unlock domestic growth potential,” she said.
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