Opposition People’s Party (PP) has described as disheartening a recent remark made by Minister of Finance Goodall Gondwe that Malawi’s economy has hit the road for a turn around.
Gondwe told the Parliament last Friday when he was presenting a mid-year budget review statement in Parliament that there are key indicators that show the economy is on the right path to recovery.
The Minister said that Government had projected the surge from an economic growth rate of 2.9 percent in 2016 to approximately 6.0 percent in 2017.
‘’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 had told the House.
But this is just not the case on the ground, claims PP’s representative, Ralph Jooma said the remarks by the Minister do not reflect the real situation on the ground.
Jooma says the Minister only sugarcoated the performance of the budget saying that there are a lot of challenges the citizens are facing that the Minister might only have omitted in his address.
‘’The review was sugarcoated. The projected GDP growth of 6.0 percent in 2017 does not make any sense.’’ He said.
Jooma told the House that the budget was crumpled by many budget pressures like subsidies, contingent liabilities and interest charges. The other issues are the continued population growth and in the next two years, it will be compressed by preparations on the elections.’’ He said.
The PP has since argued that the economy does not portray any signs of recovery as the Minister might have claimed.
Parliament had in July last year passed 2016/17 National budget pegged at K1.149 trillion.
Among other things, Gondwe requested that the revised budget be trimmed by K20 Billion.