MALAWI · ECONOMY · IMF
Key Facts
- —What changed New IMF projections show average inflation in Malawi falling to 21.9% in 2026 from 28.4% in 2025, then climbing back to 25.0% in 2027.
- —Versus April In April the IMF expected 24.4% for this year and 22.0% for next year, so the outlook for 2026 improved while the one for 2027 got worse.
- —Growth Real growth is projected at 2.6% in 2026, up from the 2.2% expected in April, before slowing to 2.3% in 2027.
- —Loan talks An IMF team ended a two-week visit to Lilongwe on 6 October with what it called considerable progress toward a new Extended Credit Facility program.
- —US travel Malawians seeking US tourist or business visas can be asked to post a bond of US$10,000 to US$20,000, and Malawi has been on the bond list since August 2025.
The International Monetary Fund expects inflation in Malawi to fall to 21.9% on average this year and then rise again to 25.0% in 2027, according to World Economic Outlook data released on Tuesday, 13 October. The 2027 figure is three percentage points above the 22.0% the fund projected in April, even though it now sees faster growth and lower inflation this year.
For Americans who invest in, trade with or fund work in Malawi, the forecast signals that the steady fall in inflation since 2024 may stall while the country negotiates a new IMF loan. Malawi already faces shortages of foreign exchange and fuel, and the government blames the fuel problem on a lack of dollars to pay for imports.
What the IMF Projects
The October data show average consumer prices rising 21.9% in 2026, after 28.4% in 2025 and 32.2% in 2024, before a rise to 25.0% in 2027. Prices in December 2026 are projected to be 22.9% higher than a year earlier, and the December 2027 figure is 24.4%.
Real growth is projected at 2.6% in 2026, up from 2.5% in 2025, but it slows to 2.3% in 2027. On Wednesday the IMF’s Malawi country page still showed the April projections of 2.2% growth and 24.4% inflation for this year.
The fund puts Malawi’s economy at about US$18.3 billion in 2026, with a budget deficit of 8.6% of output and a current account deficit of 12.2%. Public debt is projected at 78.0% of output this year, and the IMF database does not explain why its forecasts changed.
The global outlook gives some context. The IMF expects world inflation of 4.7% this year, “largely reflecting higher energy and food prices,” and its research department warned that “many energy importing and lower income economies are facing a much more challenging environment.”
The Loan Talks
An IMF team led by mission chief Justin Tyson held talks in Lilongwe from 22 September to 6 October on an Extended Credit Facility, the fund’s main lending tool for low-income countries. “The authorities and the team have made considerable progress in designing a package of macroeconomic policies that could be supported under an ECF arrangement,” Tyson said in a statement carried by Malawian media on 7 October.
The IMF said growth had been hurt by climate shocks and “a decline in demand for tobacco, the country’s largest export earner,” and that inflation had eased although non-food inflation remained high. It added that shocks to the terms of trade linked to the war in the Middle East had added pressure, according to the state broadcaster MBC.
The proposed program would combine budget tightening that protects social spending with stronger monetary policy, financial stability and better governance. Talks will continue, and any deal needs approval from IMF management and the fund’s executive board.
Malawi has had no IMF program since its previous arrangement was terminated in May 2025, The Nation newspaper reported this week, citing a new World Bank report. The paper said only US$35 million of the approved US$175 million had been paid out.
Who Is Involved
President Peter Mutharika returned to power after defeating Lazarus Chakwera in the September 2025 election and has been on what his government calls a private visit to South Africa since 6 October. Finance Minister Joseph Mwanamvekha and Reserve Bank of Malawi Governor George Partridge were among the officials who met the IMF team.
Information Minister Shadric Namalomba said this week that annual inflation fell from 28.7% in September 2025 to 20% in August 2026. He was replying to Dalitso Kabambe, president of the opposition United Transformation Movement, who has accused the government of corruption and nepotism and criticised its management of agriculture, fuel and foreign exchange.
What It Means for US Readers
Malawi has been on the State Department’s visa bond list since 20 August 2025, and the department’s page, updated on 2 October, says applicants for B-1/B-2 visas can be asked for a bond of US$10,000, US$15,000 or US$20,000. Travellers who post a bond may only use commercial air ports of entry, not land or sea crossings.
Dollars remain scarce for companies that need to import or send money abroad. Banks sold clients US$43.89 million in September, down from US$81.13 million in July, and the central bank’s indicative middle rate stood at 1,734.01 kwacha per dollar on 13 October.
A new IMF program would bring fresh financing and a public set of policy commitments that investors and donors can track. If inflation climbs back toward 25% in 2027, as the fund now projects, the real value of kwacha earnings and savings would fall faster again.
What Is Not Known
The IMF has not said why it now expects inflation to rise again in 2027, and no comment on the new projections from the government or the central bank could be found. Local media have speculated that a deal could require another devaluation of the kwacha, but the IMF statement did not announce one.
No date has been announced for a staff-level agreement on the new program. The National Statistical Office had not published its September inflation figure by Wednesday, after reporting 20.0% for August.
Frequently Asked Questions
What inflation does the IMF expect in Malawi?
The IMF projects average inflation of 21.9% in 2026 and 25.0% in 2027, after 28.4% in 2025. In April it had projected 24.4% for 2026 and 22.0% for 2027.
How fast will Malawi’s economy grow in 2026?
The IMF projects real growth of 2.6% in 2026, up from 2.2% in its April forecast. It expects growth to slow to 2.3% in 2027.
Is Malawi getting a new IMF loan?
An IMF team reported considerable progress toward an Extended Credit Facility program after talks that ended on 6 October. No agreement has been announced, and any program needs approval by IMF management and the executive board.
Do Malawians need a visa bond to visit the United States?
Malawi has been on the State Department’s visa bond list since 20 August 2025. Consular officers can require a bond of US$10,000, US$15,000 or US$20,000 for tourist and business visas.
Sources: IMF, World Economic Outlook database, October 2026, Malawi growth and inflation; IMF, World Economic Outlook database, October 2026, end-of-year inflation; IMF, World Economic Outlook database, October 2026, Malawi debt, budget and current account; IMF, Regional Economic Outlook for Sub-Saharan Africa, April 2026, statistical appendix; IMF, Malawi country page; IMF Media Center, World Economic Outlook, 13 October 2026; US Department of State, Countries Subject to Visa Bonds; Reserve Bank of Malawi, Financial Market Developments, 13 October 2026; MBC, 7 October 2026; Malawi24, 7 October 2026; The Nation, 13 October 2026; MBC, 14 October 2026; Nyasa Times, 13 October 2026. All retrieved 14 October 2026.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief