Malawi: Request for Disbursement Under the Rapid Credit Facility and Request for a Staff Monitored Program with Executive Board Involvement-Press Release; Staff Report; and Statement by the Executive Director For Malawi

International Monetary Fund

No 2022/352, IMF Staff Country Reports from International Monetary Fund

Abstract: Foreign exchange shortages together with exchange rate misalignment led to a sharp decline in imports including fuel, fertilizer, medicine, and food. Large fiscal deficits, nearly 10 percent of GDP in FY2021/22, have been largely financed by domestic bank borrowing, resulting in rapid money growth and inflation of 25.9 percent in September 2022. Exchange rate pass-through and hikes in food prices added to inflationary pressure. In addition, food insecurity in Malawi has increased dramatically under the impact of multiple tropical storms, below-average crop production, and increasing prices for food and agricultural inputs such as fertilizer and seeds. The latter are expected to affect the current planting season. As a result of these factors, about 20 percent of the population is projected to be acutely food insecure during the upcoming 2022/23 lean season (October 2022-March 2023), more than twice as many as in 2021.

Keywords: debt restructuring strategy; financing gap; government subsidy program; debt advisor; track-record building SMP; Debt sustainability; International reserves; Debt service; Africa; Global; Southern Africa (search for similar items in EconPapers)
Pages: 121
Date: 2022-11-23
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