Malawi is unlikely to meet its 2015 economic growth projection of 5.8 percent due to the impact of the agricultural sector of excessive rains suffered throughout the country, says First Merchant Bank (FMB) Group Managing Director Dheeraj Dikshit.
Malawi’s government and the International Monitory Fund projected that Malawi’s economy would grow by 5.8 percent in 2015. They based their projections largely on a “good agriculture season.”
Dikshit said in a statement he jointly signed with Finance Director John O’Neill that “reduced agricultural output may have negative consequences both for the country’s balance of payments and its fiscal deficit.”
“Accordingly, although interest rates may decline over the course of 2015, overall monetary policy is expected to be contractionary,” reads the statement from FMB.
Finance Minister Goodall Gondwe agrees that the flooding situation will, in the long run, affect that projected growth rate.
Gondwe added that although flood victims will suffer between now and June, further suffering is expected from October to about March of next year “because that’s when people’s stocks of foods come to an end.”
Torrential rains in early January washed away about 64,000 hectares of crop land – representing a food production loss of more than $8 million.
The floods, the worst to hit the southern African country in 15 years, prompted President Peter Mutharika in mid-January to declare over half of the country’s 28 districts disaster zones, and he appealed for international aid.
According to President Mutharika, the floods have cost the Malawi economy at least $54 million, excluding the cost of relief programs.