![]() ![]() ![]() Official reserves continue to be very low, declining further from their gross position of 0.5 months of import cover at the end of 2022. However, the spread between the official rate and less strictly controlled rates on cash purchases at foreign exchange bureaus at times has exceeded 50% as of end of February 2023, surpassing the pre-devaluation level. The Reserve Bank of Malawi devalued the Malawi kwacha, MWK, against the US dollar by 25% in May 2022. Non-food inflation increased to 20.5%, with particularly large increases in the costs of transport and utilities driven by international price increases and the adjustment of the exchange rate. Food inflation remains high, largely due to an increase in maize prices as well as elevated global food prices for grains and cooking oil. Headline inflation picked up to 26.7% year-on-year in February 2023, after slightly easing in November and December 2022 from its peak at 26.7% in October 2022. The economic recovery is projected to be gradual and significant risks remain. Economic growth is projected to slightly increase in 2023 but remain subdued. Growth is projected to decline to 0.9% in 2022, from 2.8% in 2021, with lower agricultural output, erratic electricity supply, forex shortages affecting importation of raw materials and high global commodity prices. Malawi’s economy has been significantly weakened by a series of exogenous shocks and persistent macro-fiscal imbalances. ![]()
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