Malawi on the Brink: Nation Faces Imminent Bankruptcy, IMF Warns
LILONGWE, MALAWI – Malawi is facing a rapidly deteriorating financial crisis, nearing bankruptcy as its debt spirals and economic indicators flash red, according to recent assessments from the International Monetary Fund (IMF) and the World Bank. The nation’s public debt reached 88% of GDP by the end of 2024, with interest payments consuming approximately 7% of GDP.
Economic growth stalled at just 1.8% in 2024, while inflation is projected to surge to 29% in 2025, according to the IMF. Foreign exchange reserves are critically low, exacerbating the country’s economic woes. As of September 2025, total public debt stood at 1,619,000 billion Malawian kwacha, representing 86.4% of GDP.
the Malawian kwacha has steadily weakened, limiting the effectiveness of monetary policy and widening the gap between official and parallel exchange rates, contributing to instability. The World Bank has categorized Malawi’s external debt situation as “distress,” signaling a high risk for international lenders.
Government discussions regarding restructuring of local currency debt now indicate a need for structural adjustment, a move that threatens the domestic financial system – including banks, pension funds, and local investors – and increases the risk of state bankruptcy.
The IMF has explicitly warned that Malawi’s “internal indebtedness is growing too quickly, external exposure is excessive.”
