Malawi’s economy improving: Finance Minister says recovery looks promising

Feb 17, 2017 Politics 69
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Malawi’s Finance Minister Goodall Gondwe says the country’s economy is on the right path to recovery owing to key indicators monitored by government and the donor community.

The Minister made the remarks when he was presenting a mid-year budget review statement in Parliament on Friday.

In his presentation on the part of the economic developments the nation has been into during the first half of the 2016/17 financial year, the Minister said the economy was dominated by effects of the calamitous weather conditions but there have been notable improvements worth calling as signs of turnaround. For example, he said that there has been a noted decline in inflation.

‘’There has been a marked decline in inflation which resulted in a 3 percentage point reduction in the Reserve Bank Policy Rate, while the exchange rate has remained relatively stable. The rate of inflation plummeted to 18.2 percent in January – the lowest since May, 2012. Food inflation went down by 3 percentage points to 21 percent and non-food inflation eased to 15 percent from 15.4 percent. This is a significant macroeconomic improvement,’’ he told the House.

He added: “Another significant indicator of a possible economic turnaround is that capacity utilisation has increased from 57.8 percent to 68.5 percent during the period, suggesting an increase in private sector confidence. Moreover, there has been a robust domestic revenue performance during this period.’’

Goodall Gondwe
Goodall Gondwe says Malawi’s economy slowly recovering.

The Minister told the house that at the moment government is hopeful this agricultural season will be far much better than last year’s owing to the issues of harvests.

“This is the basis for the Government’s projected surge from an economic growth rate of 2.9 percent in 2016 to approximately 6.0 percent in 2017. Therefore, a continuation of the implementation of the sound policies underpinning these gains is key,” he continued in his presentation.

Gondwe has since revealed that government will be receiving budgetary support from the World Bank pegged at US$80 million.

“We also expect the European Union to disburse an amount of more than US$20 million. This will be on top of some budget support that has already been provided by the African Development Bank. We also expect that the IMF will disburse more than US$20 million when they complete their ninth review of the Extended Credit Facility (ECF) within this financial year.’’

He said: “I must emphasise to the house that these are preliminary signs of a rebound, and that the extent to which a real recovery can occur depends on how our agricultural production will turn out to be in the course of 2017. The Government is, therefore, consciously optimistic that an economic recovery could emerge this year. Therefore, a continuation of sound fiscal and monetary policies is crucial.These policies must be anchored by a fiscal consolidation, now that we are discerning positive results of pursuing the sound fiscal policies that the Government has embarked on.’’

Gondwe then urged the lawmakers to give in to the issue of making adjustments to the budget so that there is balance between revenue and expenditure as well as to see to it that domestic borrowing is reduced. He also made mention that the review aims at building an economic environment within which private sector investments can respond to macroeconomic stability that could emerge and be maintained.

The Minister also indicated that the estimated fiscal deficit including grants has been adjusted downwards from K171.2 billion (4 percent of GDP) to K130.3 billion (3 percent of GDP). Excluding grants, the deficit has been revised from K365.9 billion (8.5 percent of GDP) to K289.0 billion (6.7 percent of GDP).

The deficit will be financed by K76.6 billion (1.8 percent of GDP) in foreign borrowing, and K42.3 billion (1.0 percent of GDP) in domestic borrowing.

Parliament had in July last year passed 2016/17 National budget pegged at K1.149 trillion.

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69 Comments

  1. If your businesses are improving just thank THE MOST HIGH, don’t say that the country’s economy is improving while many people are starving. Bull shit!!!

  6. Where Is Ur Presdent Dis Tym? Chi Phwi ! Like In BerbingShop Kumangomunamiza Anthu Ozikonda Okhutitsa Mimbazao Anthu Akuvutika Ndikukwela Kwa Katundu

  15. kodi mdala ameneyi pension yake sinafikebe???? kodi wanzeru za economy mmalawi monse muno ndi ekhayu kulibenso ena anaphunzira kuposa iyeyu??? ndiye akumayankhula mopusa pama salaries ama civil servants koma akat ma minister akufuna akwezeredwe ndi 300% amavomera nsanga ,,,,,,amandibhowa heavy,,,,tionana 2019

  18. The guy thinks he can fool us all the times. There is no change on the market in terms of the strength of our kwacha except from the ‘blindman’s angle”

  21. Imwe atati, economy recovery munena iti? Say this to pple who dont know the game you play…. we no play pollitics. See we see,kkkkkkkkk

  25. When he buys expensive cars 4 his family then he says Malawi’s economy is improving?Mukasowa chonena mudzingokhala chete anduna.Mukutitsutsula nazo pa chilonda zinazika.tchupit zanu!

  26. come to me bwana Gondwe and lets discuss economy!come to understand due to ur old age u hv forgotten the rules and also greenlights to better economy…….Malawi will never stabalize its economy unless true sons of the soil have been voted into power…..malawi does not need educated leaders Malawi needs a Form 4 graduate who Fears God…..i always say intelligence came to kill wisdom..take it from Gondwe lying to the whole Malawi with no shame.. An educated savage among savages……as i was made to understand a fish lots from the head….had it been that his supervisor is in his total capacity abwanawa akadaopa kunena izi but the supervisor is still incapacitated ku mangalande adasowa kunja…i repeat Malawi Does NOT need leaders who bought degrees or those who obtained them while at home…we need a form 4 graduate who really fears the true God…Wisdom is lacking…..Devil has chosen his own to wail the children of God…..but hey look up and say how strong and powerf our salvation comes……zandiwawa…

    2. Yes….we see the most educated failing the worst,atleast the less educated better.its not really education but wisdom.thats great

  27. He might have been misquoted by reporters. Perhaps he was refering to the economy in his party which has improved due corruption everywhere.

  31. gabbbage does not only imply nosense……but lack of wisdom in statements u make……goodall statements ah owez of assuarnces,…expectations,.false hopes….wrong projections…..etc a thing that owez makes me smell rats than wisdom…..eeeish

  36. Gondwe is another crocedile,which economy are talking about?sies man!wat u saying is like beating a child with fire n tell him not to cry,rubbish,go tell ur grandfather that nonsense,big crocodile

  39. Here is another Mr jokes,he want to fool ppo again.Which economy you’re talking about while Kwacha is staggering on the market, rubbish!!!

  45. Malawi’s Opposition Political Parties, CSOs & the Private Media Houses hate to hear this cos this goes against their wishes.

    1. nd whats yo connection ofyo arguement…….with the story?,…..do u think even if economy was doing well….. csoz nd opportunities wuld fail to debate hot issuez?…….economy isnt de only ting my friend……..

  48. fuck him frst , dont take Malawi’s grntd ok, osamayesa zida ai ,kutipalama mamba kumeneko, plz dont cmmnt, ndakana ,weremgani or dutsan basi ,tisayambane

  50. In as far as I know Malawi economy will never improve unless we start to produce goods and export them but if ESCOM is performing as poor as it is of now forget about economy improving , how long are you going to depend on EU IMF and world bank Tobacco our main cash crops is being robbed day light as if we don’t have leaders to intervene!

  52. Tachokani apa bodza lanulo mufuna mumnamize ndani mukuyesa ngati sitikudziwa kuti nthawi yokolola mmati kwacha yakwela ndicholinga chowabela Alimi zokolola NONSENU MUDZAFA IMFA YOWAWA

  56. Wachekulu mwayambanso bodza… By april the economy will be ok…come april u will say the economy will pick up in july and so on until december and the circus continues..

  59. he is an idiot,if thats the case y was he telling those civil servants who were demanding an increase to quit, ,he is 2 old 4 that matter,,

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