Economic growth is projected to pick up from 0.8 percent in 2020 to 2.4 percent in 2021, primarily driven by one-time increases in the agricultural sector. With a population growth rate around 3.0 percent, however, this level of economic growth equates to a contraction in per capita output. Favorable weather, as well as increased fertilizer use due to the Affordable Inputs Program (AIP), led to record harvests. While agriculture accounts for the bulk of overall growth, growth in services and industry sectors has improved but remains tepid. Malawi is beginning a fourth wave of infections induced by the Omicron variant, and the Government has modestly tightened restrictions. With less stringent social distancing policies, demand is improving from low levels. However, the private sector still faces multiple concerns which weigh on performance and investment. These include limited availability of foreign exchange, compulsory liquidation of foreign exchange, inflation on imported items (particularly fuel), perceptions of heavy taxation, limited credit, and cumbersome regulation. Headline inflation has increased to double digits in November and recent price increases have heightened concerns about the cost of living.