Malawi: Request for Disbursement under the Rapid Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for Malawi

IMF Staff Country Reports, May 15, 2020

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Canonical URL: Malawi: Request for Disbursement under the Rapid Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for Malawi

The coronavirus disease 2019 pandemic is having a severe impact on Malawi, creating an urgent balance of payments need.
The IMF’s emergency financing under the Rapid Credit Facility (RCF) is expected to help the authorities meet the large external financing gap and catalyze further assistance from the international community.
Additional concessional donor support will be critical to close the remaining external financing gap and facilitate interventions to ease the economic and social impacts of the pandemic, while preserving Malawi’s hard-earned macroeconomic stability.
A widening of the budget deficit is appropriate in the near-term, given the fiscal costs associated with the economic slowdown and critical additional health care and social spending needs, which should be executed transparently and targeted to the most affected parts of society.

Increased spending on health care and social assistance.
Support for small and medium enterprises.
Measures to bolster farmers’ incomes and ensure food security through purchase and storage of agricultural harvests.
Easing liquidity constraints in the banking system.

Use IMF RCF emergency financing to address the immediate external financing gap and signal to international partners to mobilize further assistance.
Secure additional concessional donor support to fully close the remaining external financing gap.
Accept a near-term widening of the budget deficit to finance critical health and social measures, while ensuring spending is transparent and targeted to the most affected parts of society.

Subject: COVID-19, Debt service, External debt, Health, Imports, International trade, Public debt, Revenue administration
Keywords: banking system liquidity constraint, COVID-19, CR, current account, debt relief, Debt service, development spending, emergency financing request, financial support, financing, Global, IMF lending tracker, Imports, ISCR, pandemic, revenue shortfall