Malawi Economic Monitor, December 2021 : Addressing Macro and Gender Imbalances
After several months of low COVID-19 case numbers, Malawi is facing a fourth wave. While an increasing share of the global population is protected by vaccines, only about 6.5 percent of the population is vaccinated in Malawi, increasing the country...
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| Format: | Report |
| Language: | English |
| Published: |
World Bank, Lilongwe
2021
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| Online Access: | http://documents.worldbank.org/curated/undefined/099505012202128779/P1750200ec25370fa08b4205261a47aa4ce http://hdl.handle.net/10986/36747 |
| Summary: | After several months of low COVID-19
case numbers, Malawi is facing a fourth wave. While an
increasing share of the global population is protected by
vaccines, only about 6.5 percent of the population is
vaccinated in Malawi, increasing the country’s vulnerability
to the virus. The Government response to the third wave was
less stringent than in previous waves and businesses began
adapting to COVID-19 restrictions. Thus, overall, it had
less of an economic impact than in earlier waves. However,
with cases accelerating rapidly in mid-December, Malawi is
beginning a fourth wave of infections induced by the Omicron
variant, and the Government has modestly tightened
restrictions. Economic growth is projected to pick up from
0.8 percent in 2020 to 2.4 percent in 2021, primarily driven
by one-time increases in the agricultural sector. With a
population growth rate around 3.0 percent, however, this
level of economic growth equates to a contraction in per
capita output. Favorable weather, as well as increased
fertilizer use due to the Affordable Inputs Program (AIP),
led to record harvests. While agriculture accounts for the
bulk of overall growth, growth in services and industry
sectors has improved but remains tepid. With less stringent
social distancing policies, demand is improving from low
levels. However, the private sector still faces multiple
concerns which weigh on performance and investment. These
include limited availability of foreign exchange, compulsory
liquidation of foreign exchange, inflation on imported items
(particularly fuel), perceptions of heavy taxation, limited
credit, and cumbersome regulation. Headline inflation has
increased to double digits in November and recent price
increases have heightened concerns about the cost of living. |
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