Bigger picture of the economy: IMF says Malawi has overperfomed

International Monetary Fund (IMF)has given another positive rating to Malawi’s performance under its Extended Credit Facility programme, approving a US$15.4 million disbursement.

In a statement dated November 21, Deputy Managing Directot and acting chair of the IMF Board Tao Zhang commended Malawi’s economic performance.

He said Malawi has actually overperformed in some areas.

“Malawi’s program performance has been satisfactory. Program-supported structural reforms advanced and most performance criteria were met, with significant overperformance in international reserves and reduction in the Reserve Bank of Malawi (RBM) holdings of government securities,” Zhang said

He noted that Malawi’s fiscal position declined as government tried to deliver on three areas:

1. Maize purchases to avert food insecurity
2. Financing elections. (For the first time in the history of multiparty democtacy in Malawi, government is funding the enture election budget on its own)
3. Payment of debt  arrears which were accrued at the height of economic mismanagement just because Peter Mutharika took over.

The IMF acknowledges Government commitment to deepen macroeconomic stability and enhancing poverty-reducing and resilient growth.

Zhang also says inflation is expected to be contained and exchange rate flexibility maintained.

“Economic growth, currently barely above population growth, is expected to gradually improve over the medium-term with continued macroeconomic stability and ongoing structural reforms,” says Zhang in the statement