[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-109510-en":3,"doc-seo-109510-105":31,"detail-sidebar-cat-0-en-105":92},{"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":20,"is_deleted":4,"is_public":21,"is_downloadable":21,"audit_status":21,"page_count":22,"language":23,"language_code":24,"site_id":25,"html_lang":24,"table_of_contents":26,"faqs":27,"seo_title":28,"seo_description":14,"update_tm":29,"read_time":30},109510,8796095461564,"Liam","https://ap-avatar.wpscdn.com/davatar_155a257f0dc6eb9ab79c44ca47cae57d",8,"Research & Report","Malawi Public Finance Review - Restoring Stability, Rebuilding Trust - Overview","Malawi faces its most severe public finance crisis in recent history as fiscal and external imbalances intensified by shocks since 2019. The review links a high fiscal deficit to debt monetization and costly borrowing, creating a cycle of rising debt service costs and rigid spending that crowd out growth investment. Foreign exchange distortions and quasi-fiscal activities add further pressure, while spending increases remain dominated by recurrent costs and underfunded development sectors.","Pub lic Disclosure Authorized Pub lic Disclosure Authorized Pub lic Disclosure Authorized Pub lic Disclosure Authorized  \nRESTORING  \nSTABILITY,  \nREBUILDING  \nTRUST  \nMalawi  \nPublic Finance Review  \nOVERVIEW  \nRESTORING  \nSTABILITY,  \nREBUILDING  \nTRUST  \nMalawi  \nPublic Finance Review  \nOVERVIEW  \n© 2025 International Bank for Reconstruction and Development / The World Bank  \n1818 H Street NW Washington DC 20433 Telephone: 202-473-1000  \n[Internet: www.worldbank.org](Internet: www.worldbank.org)  \nThis work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent.  \nThe World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.  \nRights and Permissions  \nThe material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work maybe reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given.  \nAny queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; [e-mail: pubrights@worldbank.org](e-mail: pubrights@worldbank.org).  \nCover image:  \n\"Firewood Sellers\"by Gilbert Mpakule  \nCover and interior design:  \nPiotr Ruczynski, London, United Kingdom; [prucz.co.uk](prucz.co.uk)  \n[Typesetting:](Typesetting:)  \nWojciech Wolocznik, Cambridge, United Kingdom Piotr Ruczynski, London, United Kingdom  \nEIGHT KEY FINDINGS  \nFROM THE PUBLIC FINANCE REVIEW  \n1 Mounting fiscal and external imbalances, compounded by a series of shocks since 2019, have pushed Malawi’s economy into its most severe crisis in recent history, and deepened the country’s decades-long economic stagnation. The fiscal deficit is among the highest in Sub-Saharan Africa, financed through debt monetization and costly borrowing, creating a vicious cycle: rising debt service costs and other rigid expenditurestake up an increasing share of fiscal space, crowding out growth-enhancing investment. Deficit financing by the Reserve Bank of Malawi (RBM) fuels inflation and exacerbates the impacts of a foreign exchange policy that constrains export growth and reduces Malawi's resilience to shocks.  \n2  \nForeign exchange distortions and the growing scale and scope of qua  \nsi-fiscal activities (QFAs) are adding to fiscal pressures. The RBM’s  \nforeign exchange operations, together with implicit fuel subsidies, distort  \nthe economy and compound fiscal challenges. QFAs among non-finan  \ncial State-Owned Enterprises (SOEs)—especially in utilities sectors and  \nfuel—have also become a major source of fiscal liabilities.  \n3  \nGovernment spending and fiscal deficits have risen sharply and remain  \nfar above pre-COVID-19 levels. Total expenditure almost doubled—from  \n16 percent of GDP in FY2011/12 to over 30 percent in FY2024/25—driven  \nby rising recurrent costs including the interest bill, civil service wages  \nand pensions, and SOE transfers. Rigid expenditures now absorb 80 per  \ncent of domestic revenue, significantly reducing fiscal flexibility. The public  \nwage bill has grown from less than 3 percent of GDP in the early 2000s to  \nover 6 percent in 2024, largely due to the expansion of the public sector  \nworkforce.  \n4  \nDevelopment spending has declined, and external financing makes up  \n60 percent of total development expenditure. Key sectors such as edu  \ncation, health, social protection, and infrastructure remain underfunded,  \nconstraining progress in critical areas. In","cbCaigM5ZC5zSFjS","https://ap.wps.com/l/cbCaigM5ZC5zSFjS","pdf",2265816,4,1,24,"English","en",105,"# Eight Key Findings from the Public Finance Review","[{\"question\":\"What core problem drives Malawi’s public finance crisis according to the overview?\",\"answer\":\"Mounting fiscal and external imbalances since 2019, amplified by shocks, have pushed Malawi into its most severe crisis in recent history.\"},{\"question\":\"How do deficit financing and the Reserve Bank of Malawi worsen macroeconomic outcomes?\",\"answer\":\"Debt monetization and costly borrowing fuel inflation and exacerbate foreign exchange constraints that limit export growth and reduce resilience to shocks.\"},{\"question\":\"What role do quasi-fiscal activities and foreign exchange distortions play?\",\"answer\":\"Foreign exchange distortions and the growing scale of quasi-fiscal activities increase fiscal pressures through operations of the Reserve Bank and implicit fuel subsidies, including liabilities from non-financial state-owned enterprises.\"}]","Malawi Public Finance Review - 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