Malawi ranked world’s sixth poorest country

Malawi’s deepening economic hardships have come into sharp focus after a new global report ranked the country as the sixth poorest in the world.

Released on Monday, July 27, a new report by Global Finance estimates Malawi’s 2025 purchasing power parity (PPP) at $1,780 per capita, highlighting the scale of the current crisis under President Peter Mutharika, who was recently re-elected.

The report says Mutharika, who previously served from 2014 to 2020 before voters returned him to office, inherited an economy described as “running on fumes.”

It adds that the country is dealing with inflation of nearly 30%, severely depleted foreign exchange reserves, and public debt approaching 91% of GDP.

While it notes that some reforms have been implemented, it concludes that growth remains too weak to improve living standards or generate sufficient employment.

Global Finance warns that Malawi’s poverty is becoming self-sustaining.

It cites weakening economic prospects alongside high interest rates as risks to debt sustainability.

It also links worsening living conditions to rising social tensions and reduced investment, driven by expectations of sluggish growth.

To measure cross-country disparities, the report uses PPP instead of standard GDP per capita, arguing that PPP reflects differences in living costs and inflation.

On this basis, it finds a wide global wealth gap, with average annual per capita purchasing power exceeding $121,000 in the world’s 10 richest economies, compared with about $1,700 in the 10 poorest.

The report further emphasizes that long-term deprivation typically results from multiple interacting factors, including corruption, the legacy of colonial exploitation, weak rule of law, war and social unrest, severe climate conditions, and pressure from hostile neighbours.