Impact of COVID-19 on poverty and inequality

As the global economy went into an unprecedented recession in 2020 following the socio-economic impacts of COVID-19, Malawi was not spared with its GDP contracting by about 4.6 percentage points in 2020 (Gondwe, 2020; World Bank, 2021, 2022 and 2023). As a net importer, the COVID-19 related disruptions in global supply chains affected both its exports and importation of essential commodities including food with glaring implications on food security, income equality and poverty reduction. These have been further amplified beyond 2020 by the global commodity price increase following the Russia-Ukraine geopolitical tension and low agricultural productivity as a result of recent extreme weather events, in particular the cyclone Freddie. Accordingly, the promising recovery from COVID-19 and attendant gains in productivity registered in 2021 have been eroded as the economy went back into a recession in 2022 with its GDP contracting by about 1.8 percentage points (World Bank, 2023). In this regard, it remains imperative to understand the key channels through which these shocks have affected poverty and inequality in Malawi. These include trade, exchange rate and inflation (prices), and employment.

Sustainable Development Goals:

No Poverty

Gender Equality

Reduced Inequalities