Malawi economy grows by 5% amidst disasters, political violence and Covid-19

Despite the triple pains of natural disasters, escalating political violence and the rage of coronavirus (Covid-19) global outbreak, Malawi economy in 2019 grew by 5 percent.

President Peter Mutharika made this revelation during his recorded  State of Nation Address on Friday.

Said  Mutharika on natural disasters: “The country has just survived the economic shocks of the Cyclone Idai. That cyclone was so devastating that we needed $365 million for recovery and rebuilding broken lives.”

He added that as the country was recovering from Idai, another challenge to the economy, in the form of political violence and COVID-19, emerged on the scene.

“As soon as violence failed to shut down our borders and cripple the economy, Coronavirus came and locked down the world. Business has slowed down, revenue collection undermined and demand to spend on social protection increased,” he said.

The Head of State, however, underlined that in spite of the challenges, the economy continues to grow.

“We maintain record low interest rates, a stable currency, single digit inflation rates and low budget deficits.

“With a real GDP growth rate of 5.1 percent, we still have managed to achieve the 2019 targeted 5 percent of economic growth. This is an improvement from the 3.9 percent real GDP growth registered in 2018,” he explained.

Mutharika noted that the growth has been driven by favourable rains and the macroeconomic stability which my Government has maintained.

The President had promised to grow the economy by at least 7 percent a year between last year and 2024.

But he h as revised downwards the  economic growth forecast for 2020 to 1.9% from an earlier projection of 5.1% because of the impact of the virus pandemic.

“Health experts have warned us to brace for the worst. Business has slowed down, and revenue collection will be undermined. It’s under this context that we’re going to base the 2020/21 budget,” Mutharika said.

Mutharika also said the International Monetary Fund (IMF) Extended Credit Facility (EFC) remains on track and the fourth and final review is scheduled for September, 2020.

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