Reigniting Malawi’s Economic Momentum: AfDB’s Revised Growth Projections
Key Business Points
- Malawi’s 2025 growth outlook has been downgraded to 2.2 percent by the African Development Bank (AfDB), citing contracting government revenue and widening fiscal deficits as major factors.
- The country’s economy is expected to rebound by 3.8 percent in 2026 and 4.9 percent in 2027, driven by improvements and investment in agriculture, tourism, mining, manufacturing, and digitalisation.
- To achieve lower middle-income status by 2030, Malawi needs to grow its economy by 10.6 percent annually, with a focus on strengthening the agricultural sector and stabilising the macroeconomic environment, as emphasized by experts like Agness Nyirongo from the Centre for Social Concern.
The African Development Bank’s (AfDB) latest forecast has downgraded Malawi’s 2025 growth outlook to 2.2 percent, a significant drop from the initial 3 percent projection in May 2025. This revision is attributed to contracting government revenue and widening fiscal deficits, which are expected to impact the country’s economic performance. Malawi is not alone in this downward trend, as other regional countries such as Eswatini, Botswana, Mozambique, and Angola have also experienced similar downgrades.
According to the AfDB’s November 2025 Africa’s Performance and Outlook Macroeconomic Update, global trade policy uncertainties and structural weaknesses are likely to continue shaping international trade dynamics, demand for Africa’s exports, and ultimately, its growth. Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha attributes the downward revision to shortage of foreign exchange and fuel, which have constrained growth in key sectors such as manufacturing and wholesale and retail.
Despite these challenges, Mwanamvekha remains optimistic about the economy’s potential for rebound, citing improvements and investment in agriculture, tourism, mining, manufacturing, and digitalisation as key drivers for growth. In fact, he projects a growth rate of 3.8 percent in 2026 and 4.9 percent in 2027. To achieve this, it is essential to kukwanilitsa kwelele za ulimi, or strengthen the agricultural sector, and kutengera nzeru za chikwamili, or stabilise the macroeconomic environment, as emphasized by experts like Agness Nyirongo from the Centre for Social Concern.
Malawi’s economic growth has averaged 2.2 percent in recent years, far below the recommended 10.6 percent required to grow the economy to a lower middle-income status by 2030. With a GDP per capita of $602.3, the country still has a long way to go to reach the lower middle-income economy mark of $1,146. As the country looks to the future, ndalama za kujumpha, or investment opportunities, in key sectors like agriculture, tourism, and manufacturing, will be crucial in driving growth and achieving the country’s long-term development goals, as outlined in Malawi 2063, the country’s long-term development strategy.
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