Finance Minister Goodall cautions on Malawi economic recovery

Minister of finance and economic planning and development Goodall Gondwe  says despite the promising economic performance witnessed half way through the 2016 – 2017 fiscal year, Malawians should not have immediate high expectations that the economy will be on track soon.

Gondwe made the remarks Friday when addressing journalists after he presented his statement on the 2016 – 2017 mid-year budget review in parliament.

The minister said midway through this year’s financial year, there had been a lot of indicators showing that Malawi could be heading towards an economic rebound, but was quick to say that these were just indicators.

“That is the trouble because these are figures which may not translate themselves into the actual welfare of the people.

“But what is very important and welcoming is the fact that we had an inflation rate of 18.2 percent, which is much lower than what we have had since May 2012 when we devalued. And, we are hoping that it will go even lower in the next months,” said Gondwe.

However, Gondwe was non committal to confirm that the country’s economy has turned up.

“I am not saying that this is a fact, but what we have seen is that we are possibly now beginning to turn the economy upwards.

“This has been indicated by a lot of factors, for example, the inflation rate we have had, the stability of the exchange rate, the capacity utilization by companies which has gone up 10 percent at each point and the high domestic revenue collection  show that we are now beginning to be on the course for recovery. And if we get the good crop that we are expecting, we will come out strong,” said he.

On the economic performance halfway the 2016 – 2017 financial year, Gondwe said one of the notable achievements was the collection  of taxes which he said was overcollected by 7.7 percent. On expenditure, he said the total expenditure during the period had gone down by 1.7 percent.

He, however, said resources from donors were disappointingly low with MK30 billion realized instead of the required total of MK103 billion.

Gondwe also said Malawi was within range of International Monitory Fund (IMF) range with government only borrowing MK25 billion instead of the expected MK40 billion.

Parliament on Monday is expected to start debating on Gondwe’s budget review statement.

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