An International Monetary Fund (IMF) mission as met Finance, Economic Planning and Development Minister Goodall Gondwe and Reserve Bank governor Charles Chuka where they have expressed concern over the rising inflation and bank interest rates.
Treasury spokesperson Nations Msowoya said the IMF technical team, apart from looking into how the government has performed in the last six months, it will discuss with government officials on humanitarian issues following food shortages in the country, the high inflation rate and the impact of the salaries increases for civil servants.
As part of the review, the team is expected to probe Capital Hill on its runaway public expenditure; scrutinise net domestic financing, net international assets and assess whether real progress is being made in public finance management (PFM).
“As government, we are prepared to discuss with them any issues they want,” he said.
He also said the IMF team will meet the private sector on issues to do with the economy.
Even before the 2015/16 national budget had settled, Malawi’s gross domestic product (GDP) growth rate was revised from a budgeted 5.1 percent to just around three percent.
And with signs that the financial market maybe up for a huge correction—several banks last week reported massive losses and sharply reduced profits after years of bubbles—fears of a recession may not be too far-fetched.
Inflation rate—according to the most recent minutes of the Monetary Policy Committee (MPC) of the Reserve Bank of Malawi (RBM)—is set to miss its budgeted target by several percentage points not just by December this year, but also by the end of the fiscal year in June 2017.