<\/p>\n
Bertha Bangara Chikadza, President of the Economics Association of Malawi, said the country is facing serious fiscal challenges driven by unsustainable public debt. Chikadza said high debt servicing costs are limiting government spending on development and essential services.<\/p>\n
As of December 2025, Malawi\u2019s public debt stood at an estimated $14 billion, placing significant pressure on public finances. Chikadza said domestic debt accounts for about 65% of the total, equivalent to roughly $9 billion.<\/p>\n
Speaking to Channel Africa on Monday, Chikadza said the country\u2019s 2026 to 2027 budget reflects ongoing fiscal strain. The projected budget stands at about $6.4 billion, or 34.8% of gross domestic product. Revenue and grants are estimated at about $4.8 billion, leaving a deficit of about 9% of gross domestic product.<\/p>\n
Chikadza warned that the deficit will force continued borrowing, increasing the risk of a prolonged cycle of debt dependence. Interest payments alone are estimated at about $1.6 billion, further reducing resources available for public services and investment.<\/p>\n
<\/p>\n
Beyond debt pressures, Malawi is also facing high inflation, which stood at 24.9% in March 2026. Chikadza said rising prices, combined with foreign exchange shortages and fuel supply constraints, are driving up the cost of living.<\/p>\n
<\/p>\n
Chikadza added that these conditions are affecting businesses, making it difficult for firms to operate profitably. Chikadza said the challenging environment is limiting growth and creating uncertainty for investors.<\/p>\n
The government has projected economic growth of 3.8% for 2026.<\/p>\n
However, Chikadza said current pressures raise doubts about whether this target can be achieved, noting that inflation and fiscal constraints could undermine performance.<\/p>\n
<\/p>\n
Malawi has turned to the World Bank for support as authorities seek to stabilise the economy. Chikadza said addressing fiscal imbalances and managing debt levels will be critical to restoring stability and supporting sustainable growth.<\/p>\n
<\/p>\n
–ChannelAfrica–<\/p>\n","protected":false},"featured_media":34886,"template":"","meta":{"_acf_changed":false},"news-type":[44],"class_list":["post-34885","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-finance","entry"],"acf":{"short_description":"Malawi\u2019s worsening fiscal position is raising concern as rising debt, weak revenue collection and increased borrowing continue to strain the economy.","published_date":"","news_description":"Malawi\u2019s worsening fiscal position is raising concern as rising debt, weak revenue collection and increased borrowing continue to strain the economy.","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/34885","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":1,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/34885\/revisions"}],"predecessor-version":[{"id":34887,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/34885\/revisions\/34887"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/34886"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=34885"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=34885"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}