National Bank predicts gloomy future for Malawi economy

National Bank of Malawi (NBM), the biggest commercial bank by assets say Malawians should brace for the tougher times for Malawi’s economy in the coming months due to high inflation, high interest rates and a depreciating kwacha.

Finance Minister Gondwe: Gloomy outlook

Finance Minister Gondwe: Gloomy outlook

It its lasted unaudited interim results released this week, the bank says the depreciating kwacha and food prices are likely to influence the rate of inflation.

“Rising food costs and a depreciating currency are expected to reverse the recent downward trend in inflation,” reads the statement, in part.

It says NBM in the statement:  “The looming food shortages will only heighten speculation and continue to push up food prices.”

The NBM says the aid freeze by Malawi’s donors in the wake the cashgate continues to force government into domestic borrowing to fill the gap, thereby exerting pressure on interest rates.

Malawi’s inflation was recorded at 21.3 percent in June 2015 up from 19.5 percent in May as pressure mounted on food prices.

Local economists also say the depreciation of the local currency the Kwacha against major foreign currencies would likely result in sharp increase in prices of commodities on the market.

Figures from various local commercial banks show the Kwacha dropped by an average of 10 percent in July alone.

Within the month, the currency dropped 11.1 percent against the US dollar and 12 percent against the Euro. It also dropped by 11.5 to a British Pound and 8.2 percent to the South African Rand.

Country representative for the International Money Fund Geoffrey Oestreicher told a local daily last week that he was “surprised” with the steep fall of the Kwacha “despite the country sitting on high levels of foreign reserves than last year.”

Recently, Minister of Finance and Economic Planning Development Goodall Gondwe conceded that the country is going through turbulent times.

Speaking during a breakfast meeting organised by the Association of Early Childhood Development in Malawi (AECDM) to lobby for more funds towards early childhood development, last Wednesday, Gondwe said the economy is in “bad” shape.

An economic observer told Nyasa Times that although DPP had “rigged the May20, 2014 election, it will not be able to rig the economy”.

He observed that the majority of the country’s leadership was more interested in political expediency rather than pragmatic bread and butter issues.

To restore Malawi’s position on a positive economic growth path, he suggested an investment is needed which calls first for investor confidence and security.

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Fwe fwe fwe
Guest

This guy called Goodall must resign. He was bright when he was a young guy. At 75+ , he cannnot perform. This is generation is for the young.

shadrecks
Guest

Ngakhale zinthu sizili bwino komabe sibwino kumangoyankhula zopanda pake.let’s just unit and see the way forward. Inflation is not strange thing almost to everyone. Let talk about solutions on this problem not pointing fingers or politics.

Muhekere wa Muhekere
Guest

DPP disaster perpetuated panickly.

dwambazi
Guest

We are a rich country remember? Mathanyula told us that we rich, we are next to the super power, our roads are paved with Gold, Businesses are booming, foreign investors are dying to invest in Malawi, our military and police force are second to none……. we are rich! no one goes to bed hungry, our education and health care systems are first class …… we are rich……. the future is bright,,,….f

anadimba
Guest

ati anavotera chimanga anthu akumudzi, koma akugona ndi njala.kumvetsa chisoniamalawi ????koma munavoterayo maphwando ndi daily.hedeeeee.mkadzi wake ndi uyu anadya za odwalayu.mai wopha anthuyu.pano amavala timamini skirt ati kudyelera.anthu nkumawavinira.hedeee iwoakugeya sausage.iwe uli ndinjala.

Chikopa
Guest

I am extremely saddened by comments from Malawians in diaspora who are busy shaming the country instead of assisting the country in whatever form they can. Kwa eni kulibe mkuwe, kwanu nkwanu mnthengo mudalaka njoka. Kumene muliko ndinu “Amtumba”. Kodi mumawatumizira Mayi Wanu ndalama? If that was the case then Malawi would have more forex? Nanga mukumanga nyumba kuno ku Malawi? Sibwenzi forex itabwera kuno? Kodi munasunga ndalama za maliro anu kuno kuti tidzalandire mtembo wanu kuno osati kuvutitsa ife opanda kanthu kale? If you could have been doing that Malawi would not have been poor. Think again.

Cash Gate
Guest

kunena zowona bora amayi, awawa ndiye zawakanika, shame on them

Chavula
Guest

Zintharika 23: 20,21

Usange boma ili likulutilira na kutemwa mapwevupwevu tiwonenge ivyo vikuyowoyeka pa Zinthalika. Tivwale zikhole

Limbanazo
Guest

Why should we point fingers at each other?things started messing up long time ago.why can’t we unite and see the way forward??these political issues will not lead us anywhere.

Alungwana
Guest

This is National Bank and not Z Allan Ntata or Dr Laz. Any word from Kaliati or Nankhumwa?

wpDiscuz

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