The International Monetary Fund (IMF) has reported an observation that Malawi has stepped up efforts to meet fiscal targets under the Malawi’s Staff Monitored Program with Executive Board Involvement (PMB).
The IMF team led by Ms. Mika Saito has been in Malawi holding discussions with the Malawi Government during August 29 – September 20.
The discussions covered a program of economic policies and reforms to be supported by a new arrangement under the Extended Credit Facility (ECF).
In its provisional report, the IMF has pointed out that Malawi has managed to adjust expenditure to offset a shortfall in revenue, and contain government borrowing to slow burden surge and secure growth.
While projecting inflation to decrease next year, the IMF has stated that Malawi’s real Gross Domestic Product (GDP) growth is projected to increase to 1.6 percent in 2023 despite shortages of foreign exchange still weighing on economic activity.
The IMF has attributed this positive stride to Government’s tightening of its monetary policy to containment of inflationary pressures as well as the resumption of foreign exchange auctions.
President Chakwera has been on relentless efforts to negotiate debt restructuring with Malawi bilateral and multilateral creditors. The initiative has also been noted by the IMF which has reported that “the authorities continue to pursue good faith negotiations with commercial and official bilateral creditors and are in arrears on commercial debt while these discussions continue”.
In May this year, President Lazarus Chakwera met with the IMF Deputy Director, Ms. Gita Gopinath, who visited Malawi to appreciate first-hand the challenges facing the Malawi’s economy in the face of recent external shocks, as well as to hear directly from the President about Malawi’s development priorities and reform programme that require support from the IMF.