The International Monetary Fund (IMF) has warned Malawi that urgent economic reforms are needed to stabilize the country’s finances, curb inflation, and protect the local currency. The message came at the conclusion of a week-long mission to the country, described by the IMF as “very productive”.
Mwanamveka and the IMF team
IMF Mission Chief for Malawi, Justin Tyson, briefed reporters in Lilongwe on Friday, highlighting what he called significant macroeconomic challenges facing the new government. Tyson pointed to a worse-than-budgeted midyear fiscal performance, accelerating inflation, continued pressure on the exchange rate, and unsustainable public debt dynamics as major concerns.
“Economic growth in 2025 is projected at a modest 2.4 percent, food insecurity remains elevated, and public debt is unsustainable,” Tyson said. “Our discussions focused on near-term policy priorities, and staff agreed with the authorities that urgent fiscal consolidation and tighter monetary policy are needed to tackle inflation, reduce imbalances, and stabilise the foreign exchange market.”
The IMF commended the government for reactivating the automatic fuel price mechanism and encouraged authorities to pursue fiscal discipline and stronger revenue mobilization, starting with the upcoming midyear budget. Tyson also noted that recent efforts to control expenditure were encouraging, but warned that more consistent and decisive action is required.
Finance Minister Joseph Mwanamvekha said the IMF visit was primarily a scoping exercise to assess Malawi’s economic situation and identify areas where technical and financial support could be offered. He confirmed that discussions would continue to determine whether Malawi would pursue a full Extended Credit Facility (ECF) programme or a Staff-Monitored Programme (SMP) going forward.
“The most important outcome is that the IMF has expressed willingness to assist Malawi in addressing its economic challenges,” Mwanamvekha said.
Analysts say the IMF’s recommendations underscore the tightrope Malawi faces: rising expenditures, persistent fiscal deficits, and high public debt, all amid growing inflation and exchange rate pressures. Failure to implement urgent fiscal and monetary measures, they warn, could threaten macroeconomic stability and limit the government’s ability to fund key development priorities.
As Malawi navigates these economic headwinds, the spotlight now falls on the government to translate IMF advice into concrete action, restore fiscal credibility, and protect ordinary Malawians from the effects of runaway inflation and food insecurity.
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