Economy - overview:
Landlocked Malawi ranks among the world's least developed countries. The economy is predominately agricultural, with about 90% of the population living in rural areas. Agriculture accounted for nearly 36% of GDP and 80% of export revenues in 2005. The performance of the tobacco sector is key to short-term growth as tobacco accounts for over 60% of exports. The economy depends on substantial inflows of economic assistance from the IMF, the World Bank, and individual donor nations. In late 2000, Malawi was approved for relief under the Heavily Indebted Poor Countries (HIPC) program. The government faces strong 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. Malawi's recent fiscal policy performance has been very strong, but a serious drought in 2005 and 2006 will heighten pressure on the government to increase spending.

GDP (purchasing power parity):
$7.645 billion (2005 est.)

GDP (official exchange rate):
$1.91 billion (2005 est.)

GDP - real growth rate:
1% (2005 est.)

GDP - per capita (PPP):
$600 (2005 est.)

GDP - composition by sector:
agriculture: 35.9%
industry: 14.5%
services: 49.6% (2005 est.)

Labor force:
4.5 million (2001 est.)

Labor force - by occupation:
agriculture: 90%
industry and services: 10% (2003 est.)

Unemployment rate:
NA%

Population below poverty line:
55% (2004 est.)

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Distribution of family income - Gini index:
50.3 (1997)

Inflation rate (consumer prices):
15.4% (2005 est.)

Investment (gross fixed):
9.5% of GDP (2005 est.)

Budget:
revenues: $844.6 million
expenditures: $913.9 million; including capital expenditures of $NA (2005 est.)

Public debt:
208.6% of GDP (2005 est.)

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

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

Industrial production growth rate:
-1.6% (2005 est.)

Electricity - production:
1.296 billion kWh (2003)

Electricity - consumption:
1.206 billion kWh (2003)

Electricity - exports:
0 kWh (2003)

Electricity - imports:
0 kWh (2003)

Oil - production:
0 bbl/day (2003 est.)

Oil - consumption:
5,450 bbl/day (2003 est.)

Oil - exports:
NA bbl/day

Oil - imports:
NA bbl/day

Natural gas - production:
0 cu m (2003 est.)

Natural gas - consumption:
0 cu m (2003 est.)

Current account balance:
-$217 million (2005 est.)

Exports:
$364 million f.o.b. (2005 est.)

Exports - commodities:
tobacco 60%, tea, sugar, cotton, coffee, peanuts, wood products, apparel

Exports - partners:
South Africa 13.4%, US 11.9%, Germany 11.5%, Egypt 8.4%, UK 6.6%, Mozambique 4.5% (2004)

Imports:
$645 million f.o.b. (2005 est.)

Imports - commodities:
food, petroleum products, semimanufactures, consumer goods, transportation equipment

Imports - partners:
South Africa 35.5%, India 7.7%, Mozambique 7.3%, Zimbabwe 6.8%, Zambia 6.3%, Tanzania 4.3% (2004)

Reserves of foreign exchange and gold:
$146 million (2005 est.)

Debt - external:
$3.284 billion (2005 est.)

Economic aid - recipient:
$401.5 million (2001)

Currency (code):
Malawian kwacha (MWK)

Exchange rates:
Malawian kwachas per US dollar - 108.894 (2005), 108.898 (2004), 97.433 (2003), 76.687 (2002), 72.197 (2001)