- The authorities have been implementing strong reforms to tighten fiscal discipline, reduce the public debt burden, and improve how markets function. These reforms provide a good foundation for an IMF-supported program.
- A program under the Extended Credit Facility (ECF) arrangement would support the objectives of macroeconomic stabilization and inclusive growth. It would include policies to sustain fiscal consolidation while protecting social spending, strengthen monetary policy, preserve financial stability, and improve governance.
- The authorities and the IMF team have made considerable progress in designing the comprehensive package of policies and reforms that could underpin an ECF-supported program. Facilitated by good collaboration and the positive reform path, discussions will continue to finalize such a package.
Lilongwe: A team from the International Monetary Fund (IMF), led by Justin Tyson, Mission Chief for Malawi, held meetings in Lilongwe from September 22 to October 6, 2026 to discuss a program under the Extended Credit Facility (ECF) arrangement. The discussions covered the recent economic development and outlook, fiscal and monetary policy implementation, and the comprehensive package of policies and reforms for macroeconomic stabilization that could be supported by the ECF arrangement.
At the conclusion of the mission, Mr. Tyson issued the following statement:
"The authorities have made progress on major reforms to restore macroeconomic stability under the National Economic Recovery Plan (NERP). In line with the 2026/27 budget targets, domestic revenue is increasing, and expenditure has been tightly controlled. It will be important for execution of the budget to remain on track. The authorities have also taken decisive actions, such as fuel and sugar pricing reforms, which helped improve market functioning. Discussions are advanced on measures to reduce the burden of high public debt. Inflation has been moderating in recent months, supported by low food inflation, though non-food inflation remains high."
"Malawi's economy is navigating a challenging environment. Growth has been affected by climate shocks and a decline in demand for tobacco, the country's largest export item. Terms-of-trade shocks since the beginning of the war in the Middle East are an added strain. While growth is expected to recover in the medium term, risks to the outlook are tilted towards the downside. In the short-run, adverse weather shocks caused by the El Niño event could impact agricultural production and intensify food insecurity across the region."
"A program under the ECF arrangement would support the authorities' objectives under the NERP to restore and preserve macroeconomic stability and promote inclusive and resilient growth."
"The authorities and the team have made considerable progress in designing a package of macroeconomic policies that could be supported under an ECF arrangement and incorporate home-grown initiatives under the NERP. This comprehensive package would aim to sustain the medium-term fiscal consolidation while protecting social spending for vulnerable households, strengthen and tighten monetary policy, preserve financial sector stability, and remove market distortions to promote growth and productivity. Strengthening governance and structural reforms will be key to macroeconomic stabilization. Facilitated by good collaboration and the positive reform path, discussions will continue to finalize the policy package that could underpin an ECF-supported program."
"The team met with the Minister of Finance, Economic Planning and Decentralization Hon. Joseph Mwanamvekha; the Governor of the Reserve Bank of Malawi Dr. George Partridge; the Secretary to the Treasury Dr. Cliff Chiunda; the Deputy Governor of the Reserve Bank of Malawi Mr. Henry Mathanga; and other senior government officials. The team also engaged with representatives of development partners."
"The team is grateful to the authorities for the candid and constructive discussions and looks forward to finalizing the policy package."
Key links:
