IMF Staff Concludes Visit to Malawi to Discuss a Program under the Extended Credit Facility Arrangement

IMF News, October 6, 2026

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Canonical URL: IMF Staff Concludes Visit to Malawi to Discuss a Program under the Extended Credit Facility Arrangement

Press Release No. 26/323, IMF Press center, October 6, 2026.
A team from the International Monetary Fund (IMF), led by Justin Tyson, Mission Chief for Malawi, held meetings in Lilongwe from September 22 to October 6, 2026 to discuss a program under the Extended Credit Facility (ECF) arrangement.
End-of-Mission press releases convey preliminary findings after a visit; the views are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board.
Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.

"The authorities have been implementing strong reforms to tighten fiscal discipline, reduce the public debt burden, and improve how markets function. These reforms provide a good foundation for an IMF-supported program."
"The authorities have made progress on major reforms to restore macroeconomic stability under the National Economic Recovery Plan (NERP)."
In line with the 2026/27 budget targets:
- "domestic revenue is increasing, and expenditure has been tightly controlled."
- "It will be important for execution of the budget to remain on track."
Policy actions taken:
- "The authorities have also taken decisive actions, such as fuel and sugar pricing reforms, which helped improve market functioning."
- "Discussions are advanced on measures to reduce the burden of high public debt."
- Inflation status: "Inflation has been moderating in recent months, supported by low food inflation, though non-food inflation remains high."

Growth drivers and challenges:
- "Malawi’s economy is navigating a challenging environment."
- Growth affected by climate shocks and a decline in demand for tobacco, the country’s largest export item.
- "Terms-of-trade shocks since the beginning of the war in the Middle East are an added strain."
Outlook and risks:
- "While growth is expected to recover in the medium term, risks to the outlook are tilted towards the downside."
- Short-run risk: "adverse weather shocks caused by the El Niño event could impact agricultural production and intensify food insecurity across the region."

Purpose: "A program under the Extended Credit Facility (ECF) arrangement would support the objectives of macroeconomic stabilization and inclusive growth."
Core components the ECF would include:
- policies to sustain fiscal consolidation while protecting social spending;
- strengthen monetary policy;
- preserve financial stability;
- improve governance.
Design progress:
- "The authorities and the IMF team have made considerable progress in designing the comprehensive package of policies and reforms that could underpin an ECF-supported program."
- "Facilitated by good collaboration and the positive reform path, discussions will continue to finalize such a package."
Intended aims of the comprehensive package:
- "sustain the medium-term fiscal consolidation while protecting social spending for vulnerable households";
- "strengthen and tighten monetary policy";
- "preserve financial sector stability";
- "remove market distortions to promote growth and productivity";
- "Strengthening governance and structural reforms will be key to macroeconomic stabilization."
- Incorporation: the package would "incorporate home-grown initiatives under the NERP."

Discussions will continue to finalize the policy package that could underpin an ECF-supported program.
Mission statement closing: "The team is grateful to the authorities for the candid and constructive discussions and looks forward to finalizing the policy package."
Staff follow-up: staff will prepare a report based on preliminary findings for management approval and potential presentation to the IMF's Executive Board.