Population 21.5 million
GDP 559 US$
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major macro economic indicators

  2020 2021 2022 (e) 2023 (f) 2024 (f)
GDP growth (%) 0.9 2.8 0.9 1.7 3.0
Inflation (yearly average, %) 7.6 11.5 21.0 28.0 19.0
Budget balance (% GDP) -8.2 -8.6 -8.7 -10.0 -9.0
Current account balance (% GDP) -13.8 -13.3 -3.0 -5.0 -8.5
Public debt (% GDP) 54.8 63.9 75.2 79.0 78.0

(e): Estimate (f): Forecast *Fiscal year 2024 from 1st July 2020 to 30th June 2024 / Grants included


  • Natural resources (tobacco, tea, coffee, sugar, soya, uranium, niobium)
  • Growing service sector
  • Active civil society
  • Relative institutional stability


  • Economy dominated by subsistence farming, vulnerable to the vagaries of climate and input prices
  • Food insecurity, extreme poverty (in 2020, 70% of the population lived on less than USD 2.15 a day)
  • Deficient infrastructure (water, energy, transport, education, health) and geographical isolation
  • Widespread corruption
  • Heavy public debt fuelled by high deficit
  • Extremely low foreign exchange reserves sustained by a massive deficit in trade in goods (fertilisers, fuel, medicines) and services despite expatriate remittances and international aid.


Growth driven by recovery in the agricultural sector

After a year 2022 marked by the human and material damage caused by Tropical Storm Ana, as well as by the inflationary consequences of the Russian-Ukrainian conflict, Malawi's growth will have rebounded slightly in 2023 and is set to gain momentum in 2024. The recovery of the agricultural sector (22% of GDP) following the double whammy of Cyclone Freddy in early 2023 will contribute to this upturn, with tobacco production in particular boosting exports (45% of total exports). Nevertheless, the durably high price of fertilisers and expected El Niño weather-related disruptions are likely to weigh on yields of the country's main crops. Moreover, while the recovery of the agricultural sector (62% of employment) will boost household consumption, the trend will continue to be held back by high inflation. The depreciation of the Malawian kwacha, as well as the shortage of certain imported goods due to the lack of foreign currency, will continue to push up the already high prices of energy and food on the domestic market. In addition, the erratic supply of electricity –70% of the country's power is generated by hydroelectric plants – will continue to hold back growth in 2023 and 2024. A high-voltage line project between Mozambique and Malawi, scheduled for commissioning at the end of 2023, will add 50 MV of capacity to the national grid, but this will still not be enough to stimulate private investment in certain sectors, such as mining. Nevertheless, the government and Globe Metals and Mining signed an agreement in March 2023 to develop the Kaniyka niobium mine, the first niobium mining project in Africa. In addition, construction of solar, hydroelectric and thermal power plants could begin in 2024 provided that the government and IMF agree on a financing program which would facilitate electricity supply.

High risk of overindebtedness

In 2022-23, the public deficit widened further as a result of increased government spending to cope with the aftermath of Hurricane Freddy and the subsequent cholera epidemic. The budgetary situation will improve slightly in 2023-24 thanks to an increase in revenues on back of the expected recovery in activity. At the same time, donations from international organisations estimated at 2% of GDP for 2023-24 will continue to supplement government revenues. In addition, the current account deficit narrowed sharply in 2022 as a result of lower imports linked to weak domestic demand. Nevertheless, it will deteriorate in 2023 and 2024 as imports pick up again. In addition, the primary income account deficit related to the repatriation of profits by foreign companies will continue to weigh on the current account, while the current transfers balance surplus will be maintained by remittances from expatriates (around 8% of GDP). Malawi's external position will remain fragile due to clandestine imports of goods and low capital inflows, coupled with the low level of foreign exchange reserves (0.9 months of imports in June 2023) that have been drained by the Central Bank of Malawi's interventions on the foreign exchange market to maintain a certain level of parity. Nevertheless, reserves are set to increase thanks to the signing of an agreement with the IMF on a USD 174 million, 48-month Extended Credit Facility (ECF), as well as the conclusion of debt restructuring agreements, the servicing of which is weighing heavily as it accounts for an estimated 24% of the 2023-24 budget. Although Malawi has just obtained a restructuring of its commercial debt with two African banks (Afreximbank and the Trade and Development Bank), it remains exposed to a very high risk of over-indebtedness. In addition, the government is seeking a restructuring of the external share (46% of the total) of its debt held by multilateral (30%) and bilateral (5%) creditors.

Fragile coalition amid a tense social context

After the Constitutional Court annulled the 2019 Presidential election on grounds of falsification of results, Lazarus Chakwera, leader of the Malawi Congress Party (MCP), won the new June 2020 re-run election, securing 59% of the vote, ahead of incumbent President Peter Mutharika, who had held office since 2014. Following these elections, the MCP won 54 of the 191 seats in the National Assembly which it governs with the support of the Tonse Alliance, a coalition that brings together eight other parties for a total of 75 seats, including independent candidates. However, the alliance is paralysed by infighting which prompted Chakwera to strip his Vice President of his powers in June 2022 in the wake of a corruption scandal. At the same time, high levels of poverty and unemployment will continue to exacerbate social frustration against a backdrop of high inflation. In addition, Malawi will continue to strengthen its ties with China, its main bilateral external debt holder and main trading partner. Furthermore, in October 2023, the President of Malawi signed a cooperation agreement with his Mozambican and Zambian counterparts on the use of the port of Nacala, located in Mozambique, aimed at boosting trade between the three countries. At the same time, a project to upgrade road infrastructure and create juxtaposed border posts on the Nacala road corridor is underway between the three countries.


Last updated: October 2023

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