Malawi Economy Profile 2008

Economy - overview

Landlocked Malawi ranks among the world's most densely populated and least developed countries. The economy is predominately agricultural with about 85% of the population living in rural areas. Agriculture accounts for more than one-third of GDP and 90% of export revenues. The performance of the tobacco sector is key to short-term growth as tobacco accounts for more than half of exports. The economy depends on substantial inflows of economic assistance from the IMF, the World Bank, and individual donor nations. In December 2007, the US granted Malawi eligibility status to receive financial support within the Millennium Challenge Corporation (MCC) initiative. Malawi will now begin a consultative process to develop a five-year program before funding can begin. In 2006, Malawi was approved for relief under the Heavily Indebted Poor Countries (HIPC) program. The government faces many challenges including developing a market economy, improving educational facilities, facing up to environmental problems, dealing with the rapidly growing problem of HIV/AIDS, and satisfying foreign donors that fiscal discipline is being tightened. In 2005, President MUTHARIKA championed an anticorruption campaign. Since 2005 President MUTHARIKA'S government has exhibited improved financial discipline under the guidance of Finance Minister Goodall GONDWE and signed a three year Poverty Reduction and Growth Facility worth $56 million with the IMF. Improved relations with the IMF lead other international donors to resume aid as well.

GDP (purchasing power parity)

$10.47 billion (2007 est.)

GDP (official exchange rate)

$3.441 billion (2007 est.)

GDP - real growth rate

5.7% (2007 est.)

GDP - per capita (PPP)

$800 (2007 est.)

GDP - composition by sector

agriculture: 36.3%
industry: 18.6%
services: 45.1% (2007 est.)

Population below poverty line

53% (2004)

Household income or consumption by percentage share

lowest 10%: 2.9%
highest 10%: 31.8% (2004)

Inflation rate (consumer prices)

8% (2007 est.)

Investment (gross fixed)

9.4% of GDP (2007 est.)

Labor force

4.5 million (2001 est.)

Labor force - by occupation

agriculture: 90%
industry and services: 10% (2003 est.)

Unemployment rate

NA%

Distribution of family income - Gini index

39 (2004)

Budget

revenues: $1.082 billion
expenditures: $1.142 billion (2007 est.)

Public debt

42.2% of GDP (2007 est.)

Industries

tobacco, tea, sugar, sawmill products, cement, consumer goods

Industrial production growth rate

2.5% (2007 est.)

Electricity - production

1.397 billion kWh (2005)

Electricity - consumption

1.299 billion kWh (2005)

Electricity - exports

0 kWh (2005)

Electricity - imports

0 kWh (2005)

Oil - production

0 bbl/day (2005 est.)

Oil - consumption

6,000 bbl/day (2005 est.)

Oil - imports

6,263 bbl/day (2004)

Oil - exports

0 bbl/day (2004)

Oil - proved reserves

0 bbl (1 January 2006 est.)

Natural gas - production

0 cu m (2005 est.)

Natural gas - consumption

0 cu m (2005 est.)

Natural gas - exports

0 cu m (2005 est.)

Natural gas - imports

0 cu m (2005)

Natural gas - proved reserves

0 cu m (1 January 2006 est.)

Current Account Balance

-$180 million (2007 est.)

Agriculture - products

tobacco, sugarcane, cotton, tea, corn, potatoes, cassava (tapioca), sorghum, pulses, groundnuts, Macadamia nuts; cattle, goats

Exports

$657 million f.o.b. (2007 est.)

Exports - commodities

tobacco 53%, tea, sugar, cotton, coffee, peanuts, wood products, apparel

Exports - partners

South Africa 12.6%, Germany 9.7%, Egypt 9.6%, US 9.5%, Zimbabwe 8.5%, Russia 5.4%, Netherlands 4.4% (2006)

Imports

$892 million f.o.b. (2007 est.)

Imports - commodities

food, petroleum products, semimanufactures, consumer goods, transportation equipment

Imports - partners

South Africa 33.9%, India 8%, Zambia 7.6%, US 6.3%, Tanzania 5.7%, Germany 4.5%, China 4.2% (2006)

Reserves of foreign exchange and gold

$140 million (31 December 2007 est.)

Debt - external

$622 million (31 December 2007 est.)

Stock of direct foreign investment - at home

$NA

Stock of direct foreign investment - abroad

$NA

Market value of publicly traded shares

$NA

Economic aid - recipient

$575.3 million (2005)

Currency (code)

Malawian kwacha (MWK)

Exchange rates

Malawian kwachas per US dollar - 141.12 (2007), 135.96 (2006), 108.894 (2005), 108.898 (2004), 97.433 (2003)

Fiscal year

1 July - 30 June