The International Monetary Fund (IMF) has warned Malawi and other low-income economies to brace for worsening global trade tensions, tightening financial conditions and shrinking aid flows as the global economy enters a new phase of uncertainty.
In a keynote speech ahead of the IMF-World Bank Spring Meetings, IMF managing director Kristalina Georgieva said global economic shifts triggered by rising tariffs, volatile markets and declining trust in multilateralism are testing the resilience of small economies such as Malawi.
She said: “As the giants face off, smaller countries are caught in the cross-currents.
“Low-income countries face the added challenge of collapsing aid flows as donor countries pivot to domestic concerns.”
Georgieva called on governments to urgently reform fiscal and monetary policies to build resilience and protect long-term growth.
In a separate interview, National Working Group on Trade Policy chairperson Frederick Changaya said Malawi needs to rethink its policy alignment and export strategy.
He said: “Our fiscal and monetary policies must be in sync.
“When the Reserve Bank of Malawi tightens while fiscal wants expansion, it creates macroeconomic confusion.” We need fiscal discipline, prudent debt management, and a strategy to avoid budget overruns.”
The sentiments come as Malawi struggles with high public debt at about K16 trillion, dwindling foreign exchange reserves at less than three months of import cover and an elevated inflation rate at 30.7 percent.
