MaSSP Report
An Update on the Short-Term Impacts of COVID-19 on the Malawian Economy, 2020-2021
Authors: Bob Baulch, Rosemary Botha, and Karl Pauw, April 2021.
This report provides an update on the short-term impacts of COVID-19 on the Malawian economy in light of the sharp increase in COVID-19 cases in December 2020 and January 2021. It extends and updates the results of previous SAM multiplier-based modeling undertaken by IFPRI during 2020 with a particular focus on the impacts of COVID-19 control measures on the recovery of the Malawian economy in 2021. As before, the authors also consider the short-run effects of external shocks associated with disruptions in trade and tourism, foreign direct investment, and remittance flows on the Malawian economy, as well as two medium-term paths assuming either faster or slower easing of restrictions during the remainder of 2020 and 2021.
With faster easing of restrictions, cumulative GDP gains turn positive by the third quarter of 2021 under the fast recovery scenario and exceed their pre-COVID-19 levels by MWK 217 billion before the end of 2021. However, under the slow recovery scenario, Malawi’s GDP continues to decline until the end of 2020 before recovering during quarters 2 to 4 of 2021. This recovery is sufficient to wipe out the losses in quarters 2 to 4 of 2020, resulting in cumulative gains under the slow recovery scenario of MWK 46 billion over two years. Relative to the without COVID-19 scenario, MWK 511 billion of GDP is lost under the fast recovery scenario and MWK 681 billion under the slow recovery one during 2020 and 2021. So, tightened restrictions following the second wave of COVID-19 cases in January/February 2021 have delayed but not reversed the economic recovery that was already underway.
The urban informal sector, manufacturing, hotels and restaurants, the wider agri-food system, and exports are the sectors which our analysis shows are most impacted by COVID-19.
Click here to read and download the report. (PDF 512 KB)
About the authors:
Bob Baulch is a Senior Research Fellow in the Development Strategy and Governance Division (DSGD) of IFPRI and outgoing Program Leader of the Malawi Strategy Support Program (MaSSP).
Rosemary Botha is a Monitoring and Evaluation Specialist with One Acre Fund. She was previously, a Research Analyst with IFPRI Malawi.
Karl Pauw is a Senior Research Fellow in the Development Strategy and Governance Division (DSGD) of IFPRI, based in Washington DC.
