Malawians should not to despair with the looming nose-dive of the country’s economic stance as government is employing effective policies to turn tables around, Finance Minister Maxwell Mkwezalamba has said.
“We should look at this as a temporary situation,” said Mkwezalamba addressing journalists in Malawi’s capital Lilongwe.
He added: “We’re implementing various measures to ensure that the economy is brought back on track.”
During the briefing, the Malawi media learnt that most annual indicators including inflation and base lending rate will not go in tandem with earlier projections by the end of this year.
The bank lending rate for instance is stagnant at 25 percent after it was raised in December last year despite earlier expectations that it would be revised downwards by end of the year.
On the other hand, headline inflation has hit 22 percent as food and non-food prices started to go up. This means the annual inflation rate might be higher than the 14 percent projection by government.
But the Mkwezalamba, a former African Union (AU) economist, said this should not be cause for alarm.
“What’s important is to ensure that we restore micro-economic stability,” he said. “We should have stable prices, exchange rate, low and stable inflation and we also achieve high level of economic growth.
Malawi, one of the poorest countries in the world – with more than half of her population surviving on less than a dollar a day – banks on donor aid to run her economy effectively.
Foreign exchange inflow levels went down recently following a decision by development partners under the common approach-CABS-to withheld their budget support to Malawi.