Today, this article takes you to have a look at the economic growth in Malawi and its neighboring country, Mozambique. Hopefully, this will help readers appreciate the current state of Malawi’s economy and identify areas for improvement.
Malawi Economic Growth
1) Food Security
Statistics from August 2022 indicated that between October 2022 and March 2023, the situation was expected to deteriorate, with 3.8 million people in Malawi (20% of the population) facing high levels of acute food insecurity (IPC Phase 3). This represented an 8% increase compared to the previous period.
2) Inflation Rate
In May 2023, the inflation rate in Malawi increased by 29.2% compared to the same month in the previous year. The maximum level was 37.9%, and the minimum was 6.3%.
~ Data published monthly by the National Statistical Office.
3) Inflation Rate in the Reserve Bank of Malawi
The Reserve Bank of Malawi (RBM) projects an average inflation rate of 24.5%.
The RBM has revised its average inflation target for 2023 to 24.5%, which is 5.8 percentage points higher than the earlier estimate of 18.2%.
4) Economic Outlook
Malawi’s economic outlook for 2023 is poor. The forecast indicates that real GDP growth will slow to just 0.7% in 2023, down from an estimated growth of 1.0% in 2022 and a projection prior to Cyclone Freddy of 3.7%.
5) GDP Growth Rate
The GDP growth rate is projected to rebound to 2.0% in 2023 and 3.5% in 2024, driven by a recovery in agriculture, tourism, exports, and foreign direct investment. However, there are headwinds such as weather-related shocks and the prolonged conflict between Russia and Ukraine.
6) Economic Overview
In 2022, Malawi experienced a decline in GDP growth, projected to be 0.9% compared to 2.8% in 2021. Factors contributing to this decline include lower agricultural output, erratic electricity supply, forex shortages affecting raw material importation, and high global commodity prices. Economic growth is expected to slightly increase in 2023 but remain subdued.
7) GDP Ranking
The worldwide gross domestic product per capita in 2021 was approximately $12,183. In contrast, Malawi’s GDP per capita reached $635, or $12.63 billion for the entire country. Malawi is one of the smaller economies, ranking 139 at that time.
Mozambican Economic Growth
Now let’s take a look at Mozambique’s economic growth in 2023.
1) Food Security
National production is expected to be close to the five-year average but may be lower than last year due to reduced crop yields and losses resulting from multiple climatic shocks in 2023.
2) Inflation Rate
The annual inflation rate in Mozambique eased for a second consecutive month to 8.23% in May 2023, down from 9.61% in the previous month, marking its lowest point since April 2022. Prices slowed down, particularly for food and non-alcoholic beverages (14.07% compared to 17.02% in April) and transportation (10.67% compared to 11.61%).
3) Economic Outlook
Mozambique’s economic recovery has gained momentum. Sectors most impacted by COVID-19, such as hospitality, transport, and communications, have rebounded, and agriculture has benefited from favorable rainfalls. Growth in 2022 stood at 4.1% and is projected to rise to 5% in 2023.
4) GDP Growth Rate
Global GDP growth in 2023 is projected to be 2.7%, the lowest annual rate since the global financial crisis, excluding the pandemic period in 2020. A modest improvement to 2.9% is foreseen for 2024.
5) Economic Overview
Mozambique’s economic recovery has gained momentum. Sectors most impacted by COVID-19, such as hospitality, transport, and communications, have rebounded, and agriculture has benefited from favorable rainfalls. Growth in 2022 stood at 4.1% and is projected to rise to 5% in 2023.
6) GDP Growth Rate
World Economics estimates Mozambique’s GDP to be $63 billion, which is 54% larger than official estimates. The 2023 data is based on IMF growth rate estimates applied to World Economics GDP data.
7) GDP Ranking
Mozambique’s GDP figure in 2021 was $15,777 million, ranking it 130th among the 196 countries. The absolute value of GDP in Mozambique rose by $1,620 million compared to 2020. Mozambique’s GDP per capita in 2021 was $492, $38 higher than in 2020, when it was $454.
Conclusion
In conclusion, it is unfortunate to say that Malawi is not making progress in all aspects of its economy. For instance, Malawi is facing acute food insecurity in 2023, with 3.8 million people (20% of the population) affected, while Mozambique has achieved food security despite the climatic shocks in 2023. Moreover, inflation rate in Malawi has increased significantly, while Mozambique has experienced a decrease. Additionally, Mozambique’s economic recovery has gained momentum, whereas Malawi’s economic outlook for 2023 is poor, with Cyclone Freddy being one of the reasons cited. Finally, Malawi’s GDP and ranking are comparatively lower than Mozambique’s. Malawi’s story is one of stagnation, blame games, excuses, poems, and speeches.
