Malawi's trade deficit is projected to narrow by 24.7 percent in the first quarter of 2026, supported by an improved secondary income position, a rise in exports, and a drop in imports, according to Nation Online. In its first Monetary Policy Report for the year, the Reserve Bank of Malawi forecasts the current account deficit will shrink to $427.6 million in the first quarter, down from $533.4 million in the final quarter of 2025. This projected improvement aligns with preliminary merchandise trade figures from the National Statistical Office, which show exports jumped by 98.3 percent to $64.6 million in February 2026 while imports declined by five percent to $279.1 million.
Despite the positive short-term outlook, local economists advise caution regarding the sustainability of the trend. Trade expert Paul Kwengwere told Nation Online that reducing imports could act as a double-edged sword, given that Malawi's manufacturing and agriculture sectors rely heavily on imported raw materials. To maintain a healthy trade balance, Kwengwere recommended that the government accelerate fast-yielding mining projects and invest in domestic import substitution facilities, such as organic fertiliser plants. Similarly, Mzuzu University economics lecturer Christopher Mbukwa noted that the existing trade gap still reflects deep structural and transactional weaknesses within the Malawian economy.