An International Monetary Fund (IMF) team recently visited Lilongwe to discuss economic and financial developments, as well as policies to support the First Review under the Extended Credit Facility (ECF) Arrangement. Productive discussions were held with the authorities and will continue to finalize necessary policies for the ECF review. Reform efforts will focus on fiscal sustainability, rebuilding external reserves, restoring debt sustainability, and addressing the impact of El Nino-induced disasters.
Ms. Mika Saito led an IMF staff team during the visit to Lilongwe from May 12 to 23, 2024, to discuss the First Review of the ECF-supported program approved by the IMF Executive Board on November 15, 2023.
Following the mission, Ms. Mika Saito provided the following statement:
“Significant progress was made in discussions with the Malawian authorities on necessary policies and reforms for the completion of the ECF-supported program’s first review. We have agreed on measures to achieve fiscal sustainability, rebuild external buffers, and restore debt sustainability. We also have a clear plan for the review process.
“The Malawian economy continues to be impacted by weather-related shocks, particularly affecting food security. Although the economic outlook for 2024 remains positive, growth is expected to be around 2 percent due to the effects of El Nino on agriculture and the overall economy. A successful winter crop could help mitigate the impact of drought on the agricultural sector.
“The IMF team commends the authorities for their commitment to completing the first review of the ECF-supported program. Maintaining fiscal discipline is crucial amid increasing expenditure pressures. Rebuilding international reserves and stabilizing the foreign exchange market are essential for trade credit recovery and reducing vulnerability to external shocks. Addressing governance and institutional weaknesses remains a priority, and successful external debt restructuring is crucial for macroeconomic stability.
“Discussions will continue in the coming weeks to finalize the First ECF Review. We thank the Malawian authorities and other stakeholders for their collaboration, warm welcome, and productive discussions.”
Distributed by APO Group on behalf of International Monetary Fund (IMF).