Ecama president Bertha Bangara-Chikadza highlighted this after observing that the monthly fiscal deficits sharply dropped from October 2025 compared to previous months and the corresponding period in 2024. For instance, according to the central bank’s November Economic Review, the budget deficit was recorded at K10.8 billion in October 2025 down from K327 billion in September and 94 percent lower than K384 billion in the corresponding period 2024. In November 2025, the deficit was recorded at K76.4 billion, which was less than half the K171 billion shortfall recorded in November 2025, meaning that the two months’ cumulative deficit dropped by 77.3 percent from K384.1 billion in 2024 to K87.2 billion in 2025.
During the two months, expenditures slightly dropped year-on-year from K1.086 trillion in 2024 to K1.076 trillion while revenues increased from K702 billion in 2024 to K988.8 billion. Bangara-Chikadza said: “The assumption is that government is going towards cash-budgeting as stated in the mid-year budget statement. If this is sustained, we except debt accumulation to go down since new debt is equivalent to deficit-plus-interest payments due.” “This is a positive signal and can help restore confidence in the government’s commitment to addressing longstanding fiscal challenges facing the economy,” Leman said.
Meanwhile, Leman said sustaining these quick gains will require firm expenditure controls alongside broadening and strengthening domestic revenue sources. This comes at a time Government has rejected Treasury bills (T-bills) bids in a move fiscal and monetary authorities say is meant to tame appetite for domestic borrowing and prioritise fiscal consolidation and debt sustainability. Since the onset of this year, government has rejected T-bills bids valued at K348 billion as it seeks to reduce its appetite for high borrowing costs amid elevated domestic debt levels at about K14 trillion, which is 65 percent of the total public debt at K22 trillion, an equivalent of 86 percent of gross domestic product.
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Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha said the rejection is a deliberate move to induce a decline in interest rates and reduce domestic borrowing and interest rate payment. He said: “If we reduce borrowing, we will be reducing our debt burden, reduce interest payment and guarantee increased private sector credit, which could spur economic growth.” Cumulatively, Malawi recorded a total fiscal deficit of about K1.45 trillion between April and November 2025, of which K1.36 trillion was accumulated between April and September.
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