Malawi’s economy to grow in 2016- IMF

There is a continued light at the end of the tunnel or the Malawi government as the International Monetary Fund (IMF) has made revelations that the country’s economy will attain growth ranging from between 3-4 percent this year.

Among other things, the IMF says Malawi’s inflation will keep going down and the GDP for last year got placed at just 3 percent.

The statement also reveals that the country’s inflation has seen a 2 percent decrease to 23.4 percent in February 2016 from 25 percent in December 2015.

IMF says that non-food inflation on a clear declining trend, a thing the fund hints shows that adjustments in monetary and fiscal policies are having their intended effects.

The fund says restoring macroeconomic stability by bringing inflation down to single digits, remains the most important policy challenge in the near term.

It says the revised budget approved by parliament recently is sufficient to meet the end-June 2016 programme target on net domestic financing.

“Prudent fiscal policy, when combined with a tight monetary stance to maintain positive real interest rates, should place inflation on a downward path,” reads the statement, in part.

“The mission reached understandings to ensure that recent improvements in macroeconomic policy implementation are sustained,” the statement states.

Recently, the IMF revealed that the sustained stabilization of the Malawi kwacha is due to the absorption of excess liquidity from the banking system by the Reserve Bank of Malawi, and fiscal discipline by the Malawi government and to prospects of the tobacco season.

The IMF in the meeting with Malawi’s Minister of Malawi as led by Oral Willams announced that the fund had gotten impressed with the Extended Credit Facility (EFC) and declared it back on track.