[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-111021-en":3,"doc-seo-111021-105":29,"detail-sidebar-cat-0-en-105":90},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":4,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},111021,13056703020460,"Valentina","https://ap-avatar.wpscdn.com/avatar/be000253dac470eee5d?_k=1778207105932848923",8,"Research & Report","Malawi Joint Bank-Fund Debt Sustainability Analysis - Debt distress risk assessment","Joint World Bank-IMF debt sustainability analysis for Malawi evaluates external and overall debt distress risks and applies staff judgment and granularity rules. Results rate both external debt distress and overall risk as high, with unsustainable debt outcomes under current policies. The report links deterioration to a weaker debt-carrying capacity, definitional changes for external debt, and conversion of short-term reserve liabilities. It highlights large financing needs, low international reserves, pandemic impacts, persistent fiscal and current account deficits, and baseline risk from a sudden stop of regional development bank financing.","Public Disclosure Authorized  \nPub lic Disc losure Authorized  \nApproved by:  \nMarcello Estevão and Asad Alam (IDA) , and Vivek Arora and Bjoern Rother (IMF)  \nPrepared jointly by the staff of the International Development Association (IDA) 1 and the International Monetary Fund (IMF) .  \n\n| MALAWI: JOINT BANK-FUND DEBT SUSTAINABILITY ANALYSIS 2 |  |\n| --- | --- |\n| Risk of external debt distress | High |\n| Overall risk of debt distress | High |\n| Granularity in the risk rating | Unsustainable under current policies |\n| Application of judgment | No |\n\nIn comparison to the previous Debt Sustainability Analysis (DSA), Malawi’s risk of external debt distress has been downgraded from moderate to high risk of debt distress and overall public debt has been maintained at high risk of debt distress. Granularity in risk rating has changed and staff now assess that the overall and external public debt are unsustainable under current policies. Large financing needs in the coming years and low level of international reserves suggest high risk of future distress. The change is due to significant debt vulnerabilities that emerged since the last DSA as reflected in large and protracted threshold breaches on one of two debt stock burden indicators and both of the debt service burden indicators. Debt burden indicators in this DSA (relative to the previous DSA) deteriorated due to: (i) a downgrade in the debt carrying capacity from medium to weak; (ii) a change in the definition that external debt is based on, from a currency to a residency basis, which accurately classifies and captures mediumterm domestic bond held by nonresident as external debt; and (iii) the conversion of the Reserve Bank of Malawi’s (RBM) short-term reserve liabilities to medium-term external debt.  \nDespite the challenging macroeconomic situation, the authorities remain committed to prioritizing debt service payments and Malawi remains current on all its debt obligations. Malawi has been severely affected by the pandemic. It is a fragile economy with elevated poverty rates, food insecurity and frequent weatherrelated shocks. Moreover, substantial development and social spending needs, a high debt burden from the past, and much lower budget support and grants financing are contributing to sustained fiscal and current account deficits in the near to medium term. Thus, total public debt is projected to increase over the near to medium term but at the same time, Malawi’s exposure to financing risks is significant. Staff assess the main risk to the baseline is a sudden stop of available financing especially from the regional  \ndevelopment banks (RDBs) .3 If this risk materializes, an abrupt forced adjustment becomes inevitable, with a significant impact on growth, financial stability and the most vulnerable segments of the population.  \n1. The DSA covers central government debt, central government guaranteed debt, and central bank debt contracted on behalf of the government (Text Table 1) .4 Public debt used for this DSA is public and publicly guaranteed (PPG) external and public domestic debt, covering debt contracted and guaranteed by the central government and the Reserve Bank of Malawi (RBM) . Due to data limitations, it does not include debt held by state and local governments, other elements in the general government (such as the social security fund and extra budgetary funds), or non-guaranteed state-owned enterprise (SOE) debt.5  \n|  |  Subsectors of the public sector  Check box \u003Cbr>Central government\u003Cbr>State and local government\u003Cbr>Other elements in the general government\u003Cbr>o/w: Social security fund\u003Cbr>o/w: Extra budgetary funds (EBFs)\u003Cbr>Guarantees (to other entities in the public and private sector, including to SOEs) Central bank (borrowed on behalf of the government)\u003Cbr>Non-guaranteed SOE debt\u003Cbr>X\u003Cbr>XX |\n| --- | --- |\n| 1\u003Cbr>2\u003Cbr>3\u003Cbr>4\u003Cbr>5\u003Cbr>6\u003Cbr>7\u003Cbr>8 |  |\n\nPublic debt coverage and the magnitude of the contingent liability tailored stress test  \n\n| 1 | Th","cbCaiaDZFVF90KQq","https://ap.wps.com/l/cbCaiaDZFVF90KQq","pdf",1180983,1,22,"English","en",105,"# Key Risk Ratings\n## External debt distress risk\n## Overall public debt distress risk\n## Granularity and staff judgment\n# Drivers of the Rating Deterioration\n## Debt carrying capacity downgrade\n## External debt definition change\n## Conversion of reserve liabilities\n# Baseline Vulnerabilities and Financing Risks\n## Financing stop risk from RDBs\n## Implications for adjustment and vulnerable groups\n# Scope and Coverage of the DSA\n## Public and publicly guaranteed debt\n## Contingent liability and stress testing","[{\"question\":\"What are the main debt distress risk results for Malawi?\",\"answer\":\"The analysis rates both the risk of external debt distress and the overall risk of debt distress as high. It also concludes that debt is unsustainable under current policies.\"},{\"question\":\"Why did Malawi’s risk rating worsen compared with the previous DSA?\",\"answer\":\"The rating changed due to significant debt vulnerabilities, including large and prolonged threshold breaches. Contributing factors include a downgrade in debt carrying capacity, a new external debt definition based on residency, and conversion of reserve bank short-term liabilities into medium-term external debt.\"},{\"question\":\"What is the key risk to the baseline scenario?\",\"answer\":\"Staff identify a sudden stop of available financing, especially from regional development banks (RDBs). If it occurs, a forced adjustment is expected with major effects on growth, financial stability, and vulnerable populations.\"}]",1784488185,55,{"code":4,"msg":30,"data":31},"ok",{"site_id":24,"language":23,"slug":32,"title":13,"keywords":33,"description":14,"schema_data":34,"social_meta":85,"head_meta":87,"extra_data":89,"updated_unix":27},"malawi-joint-bank-fund-debt-sustainability-analysis-debt-distress-risk-assessment","",{"@graph":35,"@context":84},[36,53,67],{"@type":37,"itemListElement":38},"BreadcrumbList",[39,43,47,50],{"item":40,"name":41,"@type":42,"position":20},"https://docshare.wps.com","Home","ListItem",{"item":44,"name":45,"@type":42,"position":46},"https://docshare.wps.com/document/","Document",2,{"item":48,"name":12,"@type":42,"position":49},"https://docshare.wps.com/document/research-report/",3,{"item":51,"name":13,"@type":42,"position":52},"https://docshare.wps.com/document/malawi-joint-bank-fund-debt-sustainability-analysis-debt-distress-risk-assessment/111021/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":23,"description":14,"dateModified":61,"datePublished":61,"encodingFormat":60,"isAccessibleForFree":62,"interactionStatistic":63},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":40,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-19",true,{"@type":64,"interactionType":65,"userInteractionCount":4},"InteractionCounter",{"@type":66},"ViewAction",{"@type":68,"mainEntity":69},"FAQPage",[70,76,80],{"name":71,"@type":72,"acceptedAnswer":73},"What are the main debt distress risk results for Malawi?","Question",{"text":74,"@type":75},"The analysis rates both the risk of external debt distress and the overall risk of debt distress as high. It also concludes that debt is unsustainable under current policies.","Answer",{"name":77,"@type":72,"acceptedAnswer":78},"Why did Malawi’s risk rating worsen compared with the previous DSA?",{"text":79,"@type":75},"The rating changed due to significant debt vulnerabilities, including large and prolonged threshold breaches. Contributing factors include a downgrade in debt carrying capacity, a new external debt definition based on residency, and conversion of reserve bank short-term liabilities into medium-term external debt.",{"name":81,"@type":72,"acceptedAnswer":82},"What is the key risk to the baseline scenario?",{"text":83,"@type":75},"Staff identify a sudden stop of available financing, especially from regional development banks (RDBs). If it occurs, a forced adjustment is expected with major effects on growth, financial stability, and vulnerable populations.","https://schema.org",{"og:url":51,"og:type":86,"og:title":13,"og:site_name":58,"og:description":14},"article",{"robots":88,"canonical":51},"index,follow",{"doc_id":7,"site_id":24},{"code":4,"msg":5,"data":91},[92,96,100,104,109,114,119,122,127,130,134],{"id":20,"doc_module":4,"doc_module_name":45,"category_name":93,"show_sort_weight":94,"slug":95},"Story & Novel",90,"story-novel",{"id":46,"doc_module":4,"doc_module_name":45,"category_name":97,"show_sort_weight":98,"slug":99},"Literature",80,"literature",{"id":52,"doc_module":4,"doc_module_name":45,"category_name":101,"show_sort_weight":102,"slug":103},"Exam",70,"exam",{"id":105,"doc_module":4,"doc_module_name":45,"category_name":106,"show_sort_weight":107,"slug":108},5,"Comic",60,"comic",{"id":110,"doc_module":4,"doc_module_name":45,"category_name":111,"show_sort_weight":112,"slug":113},6,"Technology",50,"technology",{"id":115,"doc_module":4,"doc_module_name":45,"category_name":116,"show_sort_weight":117,"slug":118},7,"Healthcare",40,"healthcare",{"id":11,"doc_module":4,"doc_module_name":45,"category_name":12,"show_sort_weight":120,"slug":121},30,"research-report",{"id":123,"doc_module":4,"doc_module_name":45,"category_name":124,"show_sort_weight":125,"slug":126},9,"Religion & Spirituality",20,"religion-spirituality",{"id":125,"doc_module":4,"doc_module_name":45,"category_name":128,"show_sort_weight":125,"slug":129},"World Cup","world-cup",{"id":131,"doc_module":4,"doc_module_name":45,"category_name":132,"show_sort_weight":131,"slug":133},10,"Lifestyle","lifestyle",{"id":135,"doc_module":4,"doc_module_name":45,"category_name":136,"show_sort_weight":105,"slug":137},19,"General","general"]