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Balance of Payments and International FDI Position in Malawi: FY2019/20
Malawian merchandise export earnings have been decreasing consistently until 2018. The slower export earnings have deteriorated Malawi’s current account balance. The balance of payments has been volatile but gross official reserves have increased slightly due to the persistent capital and financial account surplus despite the decreasing inward foreign direct investment (FDI) inflows and increased the outward FDI outflows. These capital flows have been adverse for Malawi’s balance of payments and deteriorated the country’s net international FDI position. Nonetheless, Malawi’s balance of payments is projected to recover to surplus from 2020 onwards, which is projected to support growth of gross official reserves in the medium-term.