The World Bank has commended the Malawian government for executing its national budget within approved limits for the first time in over five years, according to Nation Online. Data from the 23rd Malawi Economic Monitor released this week shows the primary fiscal deficit dropped from 3.7 percent to 0.4 percent of gross domestic product, while the overall deficit narrowed to 8.8 percent. Despite these fiscal gains, World Bank officials noted that economic growth, projected at 2.7 percent for 2026, remains too weak to significantly improve living standards due to persistent inflation and foreign exchange distortions, Nation Online reports.
Finance Minister Joseph Mwanamvekha has ruled out further devaluation of the Kwacha as the government negotiates a new credit facility with the International Monetary Fund, according to Nyasa Times. Mwanamvekha stated officials are seeking a local reform program to protect citizens from economic shocks, the outlet noted. The Consumer Association of Malawi supported this stance in a public statement. The Maravi Post reports that the group warned further currency devaluation would increase import costs for fuel, fertilizer, and medicine.
To address the ongoing foreign exchange scarcity, the Reserve Bank of Malawi implemented new limits on taking foreign currency across borders, according to allAfrica. A new central bank directive caps the physical transport of foreign cash at $1,000 for departing individuals without prior written approval, the publication adds. Nyasa Times reports that the monetary authority also placed monthly withdrawal limits on diplomatic missions, restricting embassies to $15,000 for operations and individual ambassadors to $3,000.
Private sector leaders are calling for policy changes to ease the difficult business environment, according to Nyasa Times. During a Business Breakfast in Blantyre on Thursday, industry executives holding over 10 trillion Kwacha in assets told government officials that heavy taxes, energy deficits, and forex shortages are stalling investment, the outlet reports. In response, Minister of Industrialization, Business, Trade and Tourism Simon Itayi stated that the government is drafting a Smuggling Bill and an import substitution strategy to boost the country's export markets, Nyasa Times adds.