GDP Growth and Public Finance in Malawi: FY2019/20

Malawi’s real GDP growth has been slowed down by political, climate and external factors. Policy uncertainty and governance challenges like the “cashgate scandal” have weakened domestic and external confidence which resulted in weak investment and export opportunities. This was worsened by the drought in 2015 and 2016 that affected maize production and depressed the hydroelectricity generation. The higher operating costs caused by electricity supply shortages and low capacity utilisation weakened the Malawian manufacturing and trade sectors. As a result, real GDP declined to annual average of 3.1% from 2015 to 2017 (2014: 5.7%). Improvements in the weather conditions boosted agricultural output in 2017 leading to a recovery in GDP to a projected 3.2% in 2018.