Malawi is projected to record the largest fiscal deficit on the African continent in 2026, according to a revised forecast by the World Bank.
The international lender raised its estimate of the country's budget shortfall from 9% to 11.8% of gross domestic product, signaling deepening macroeconomic imbalances.
The upward revision underscores the severity of Malawi's public finance challenges.
A deficit of this magnitude typically strains government liquidity and increases reliance on external financing or domestic borrowing, which can crowd out private sector credit.
The adjustment reflects a deterioration in the fiscal outlook relative to earlier projections.
This development adds to existing external sector pressures.