Located in Southern continental Africa, landlocked Malawi occasionally garners news media with reports of drought and famine. Malawi is home to 13 million people of whom 55 percent live below the poverty line, sadly, this reflects in a low life expectancy of only 42 years. Foreign aid helps to contribute to improve living standards as Malawi is one of the world’s poorest countries.
Economic Statistics
Total GDP as measured by purchasing power parity stands at $7.5 billion USD (2005) with corresponding GDP/Capita at $600 USD. Market GDP stands at $2 billion USD.
GDP growth fell 3 percent of GDP in 2005, 1999 showed good positive growth at 4 percent. Inflation for 2005 came in at 15.4 percent, year 2000 at 35 percent, 1999 at 50 percent and 1995 at 83 percent. The current account deficit came in at $217 million USD (2005), the trade component is in deficit at $281 million USD. Public debt stands at 209 percent of GDP (2005), external debt stands at $3.3 billion USD (2005). Agricultural output (ie maize, tobacco) represents 36 percent of GDP, 80 percent of export revenue in 2005. International reserves stand at $146 million USD (2005). No oil & gas production.
CURRENCY: ISO Symbol ‘MWK’, Malawi kwacha, Malawian kwacha, kwachas (pl). At time of currency review on June 19, 2006, the kwacha had an exchange valuation of 140.45 MWK to the USD and/or 176.57 MWK to the Euroland euro (EUR). The currency regime in place is that of a floating exchange rate. The central bank will use international reserves to smooth short term fluctuations for the kwacha exchange rate.
CURRENCY HISTORY: historical exchange quotes include: year 1993 at 4.4 MWK to the US-dollar (USD), 1994 at 8.73, 1995 at 15.28, 1996 at 15.3, October 1997 at 17.53, 1998 at 31.1 (significant devaluation in August 1998), 1999 at 44.2, 2001 at 72.2, 2002 at 76.69, 2003 at 97.43 and 2004 at 108.89. The Malawian kwacha came into inception in 1971 when it replaced the Malawian pound at an exchange rate of 2 kwachas to the pound.
CURRENCY FORECAST: the kwacha exchange rate is highly correlated to the success of the country’s agricultural output particularly the tobacco crop which represents 60 percent of exports. Currency risks include drought which can impact hydro-electric power adversely, violence and the impact of the AIDS epidemic.
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