The short-term impacts of COVID-19 on the Malawian economy, 2020–2021: A SAM multiplier modeling analysis

Baulch, Bob; Botha, Rosemary; and Pauw, Karl. 2020. The short-term impacts of COVID-19 on the Malawian economy, 2020–2021: A SAM multiplier modeling analysis. MaSSP Report November 2020. Washington, DC: International Food Policy Research Institute (IFPRI). https://doi.org/10.2499/p15738coll2.134160.

This paper has been written for the 2020 ECAMA Lakeshore Conference. It extends and updates the initial results of modeling undertaken by IFPRI to assess the short-run impacts of COVID-19 control measures on the Malawian economy. We also consider the short-run effects of external shocks associated with disruptions in trade and tourism, investment, and remittance flows on the Malawian economy, as well as two medium- erm paths assuming either faster or slower recovery during the remainder of 2020 and 2021. Using a SAM multiplier model, we estimate GDP declines by around 16.5 percent during April/May 2020 due to social distancing measures. This leads to around 1.6 million people, mainly in rural areas, temporarily falling into poverty, although urban households suffer the largest income losses.