Mr. Sanjeev Gupta, Mr. Benedict J. Clements, Maria Teresa Guin-Siu, and Mr. Luc E. Leruth
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The COVID-19 pandemic and the August 2020 coup d’état have disrupted more than half a decade of strong economic performance, during which growth averaged 5 percent.1 Growth is projected to decline from 5 percent to -2 percent in 2020 both on account of the pandemic (reflecting a slowdown in external demand, travel, and FDI, as well as the impact of uncertainty and reduced mobility on domestic demand) and of post-coup disruptions in trade, transport, economic and financial flows following the sanctions imposed by the Economic Community of West African States (ECOWAS). Inflation accelerated slightly in recent months but is expected to remain below 2 percent, while the current account deficit is projected to narrow due to higher gold prices (main export) and lower oil prices (main import). Risks around the outlook are exceptionally high in light of the uncertainty surrounding the political transition, the impact of the sanctions on trade and overall activity, and continued deterioration in the security situation. Weak social safety nets amid high informality, food insecurity and a fragile healthcare system exacerbate challenges.
International Monetary Fund. External Relations Dept.
With large uncertainties surrounding a possible avian flu pandemic, the IMF is complementing the efforts of other international organizations—including the World Bank, the World Health Organization, the Food and Agriculture Organization, and the World Organization for Animal Health—to help member countries strengthen national contingency plans. For its part, over the near term, the IMF will focus on helping countries manage operational risks in their financial systems if a pandemic erupts.
1. On behalf of our Malawian authorities, we thank management and staff for their timely response to this second request for emergency financial assistance under the Rapid Credit Facility (RCF). Our authorities believe the RCF disbursement would help catalyze additional support from development partners.