The World Bank says the number of people living in poverty is expected to increase in 2025 amid ongoing challenging economic environment and rising food insecurity.
The Bretton Woods institution estimates that an additional 417 000 people in Malawi will this year fall below the international poverty line of $2.15 (about K3 764) per day, increasing the number of people living in poverty.
In its update on development and economy published last week, the World Bank highlighted that Malawi’s real gross domestic product (GDP) is projected to grow modestly by two percent during the year under review, which would not be sufficient to prevent a fourth consecutive contraction in per capita income.
It said the GDP growth will be driven by a modest recovery in the agricultural sector, which experienced negative growth in 2024 due to El Niño-induced drought conditions.
Reads the update in part: “Additionally, modest growth is anticipated in the industrial and services sectors and will remain subdued due to the continued unavailability of foreign exchange, which is constraining the importation of production inputs.”
In the past three years, the World Bank says per capita income has declined as Malawi’s economic growth at below two percent lagged population growth rate of 2.3 percent, coupled by widening fiscal and current account deficits, an unsustainable debt burden, increasing capital and price controls and severe foreign exchange shortages.
Published data from the International Monetary Fund (IMF) shows that the GDP per capita income has dropped over the past four years to $463.73 (about K810 713) in 2024 from a peak of $580.92 (about K1 million) in 2021.
Economists say a higher GDP per capita is generally associated with a higher standard of living.
In recent years, the country registered a growth of 1.9 percent and 1.8 percent in 2023 and 2024 respectively, due to cyclones such as Freddy and El- nino weather related conditions, which reduced agricultural production.
According to the data, economic growth has averaged 2.2 percent, far below the recommended 10.6 percent required to grow the economy to a lower middle income status by 2030, with a GDP per capita mark of about $1 086 (about K1.9 million) as envisaged in Malawi 2063, the country’s long-term development strategy.
Centre for Green Economy in Developing Countries global lead Velli Nyirongo said in an interview on Sunday that efforts to reduce poverty and boost the economy are being undermined, leaving the majority of Malawians with little hope for better conditions unless significant reforms and support are put in place.
“High inflation and food shortages are making life harder for most Malawians, as basic goods become un affordable and nearly a third of the population faces serious hunger,” he said.
Ministry of Finance and Economic Affairs spokesperson Williams Banda said in a written response on Sunday that government is implementing a number of initiatives to promote economic growth and development.
“Among them, agriculture has been earmarked through mega farms and irrigation farming,” he said.
In the 2025/26 Budget Statement, Minister of Finance Simplex Chithyola Banda said government remains hopeful that the economy will grow at 3.2 percent in 2025.
The optimism was mainly due good rainfall and positive contributions from expected high investments in agriculture, tourism and mining sectors.
