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Malawi - Joint World Bank-IMF Debt Sustainability Analysis (English)

Malawi is at moderate risk of external debt distress with limited space to absorb shocks and high risk of overall debt distress. Under the baseline scenario reflecting the negative macroeconomic impact and rise in fiscal borrowing in 2020 related to the Coronavirus (COVID-19) pandemic and a gradual increase in project loans over the medium term, a moderate rating is maintained for external debt distress. However, the present value of external debt-to-exports ratio is projected to deteriorate, reflecting a slower export recovery as a result, the country’s capacity to absorb shocks is expected to narrow. While debt remains sustainable, Malawi is at high overall risk of debt distress. The present value of total public debt-to-GDP is projected to remain above the benchmark over the projected period under the baseline scenario. This mainly reflects materially larger domestic primary deficits financed through domestic debt contracted at high interest rates, especially during FY 2020-2021-FY 2021-FY2022. This Debt Sustainability Analysis (DSA) incorporates current projections of the impact from the Coronavirus (COVID-19) pandemic.




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Malawi - Joint World Bank-IMF Debt Sustainability Analysis (English). Washington, D.C. : World Bank Group.