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| This article requires pre-publication review by an uninvolved reviewer (one not substantially involved in writing the article). –Article last amended: Jul 13 at 23:42:46 UTC (history) |
Sunday, July 13, 2025
World Bank warns of deepening economic crisis in Malawi
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Lilongwe, Malawi — The World Bank has warned that Malawi’s economy is in a deep and prolonged crisis, marked by high inflation, food insecurity and declining living standards, according to its latest Malawi Economic Monitor released on July 11, 2025.
The report, titled Navigating Uncertainty, states that economic growth has fallen from an average of 4.1% (2011–2019) to 2.2% since 2020. In 2024, Malawi’s economy grew only 1.8%, affected by El Niño-induced drought and foreign exchange shortages. Growth for 2025 has now been downgraded to 2.0%, below the country’s 2.6% population growth rate.
Inflation remains elevated due to high food prices, exchange rate dynamics, and rising fiscal deficits. Maize production remains below national needs, with current estimates at 2.9 million metric tons — short of the required 3.3 to 3.5 million metric tons. Despite a 5.4% increase from the previous season, output is still 24.7% lower than the 2019–2023 average.
The World Bank expressed concern over Malawi’s rising public debt, a 22.0% current account deficit, and the premature end of its IMF programme. The report also points to fiscal overspending during the 2024/25 budget cycle and warns of continued imbalances due to election-year pressures in 2025/26.
In response, the World Bank recommends urgent reforms: restoring macroeconomic stability, encouraging private sector growth, and investing in climate-resilient agriculture. These include phasing out fuel subsidies, resolving debt restructuring, controlling inflation, and reducing trade barriers.
