Malawi’s inflation rate is likely to go down to 8 per cent by the end of this year (2019) if the government follows key principles by the International Monetary Fund (IMF).
The inflation rate is expected to go down further to 5 per cent in the next three years coming.
Speaking to journalists at Parliament in an interview after his wind-up statement on the Mid Year Budget review, Minister of Finance, Economic Planning and Development Goodall Gondwe said Malawi is doing well in economy because the inflation rate is going down.
He said IMF and World Bank have commended the government for the same describing the country as going in the right direction economically.
“At first the inflation rate was very high at 37 per cent. Now we are at 8.8 per cent, which shows that we have established a foundation of economic growth and foreign investors can come and operate their businesses without problems,” said Gondwe.
He said the inflation rate was very high during the cash gate period (2013/14), making it difficult for investors to come and start operating their businesses in the country.
Due to reduced inflation rate this time around, the finance minister said people can now run their businesses without problems.
He observed that due to high inflation rate in the past, foreign reserves were affected.
“If you do not have foreign reserves, it is difficult to go ahead with projects that require importing raw materials, machinery and transportation.
“It is pleasing to note that as of now, the government has accumulated foreign reserves and as a minister, I am proud of it,” he said.
Meanwhile, Parliament has authorised government to use a revised budget for the second half of the financial year with cuts made to some expenditure lines on development projects.
This means that the 2018/19 National Budget has been revised downwards by K25 billion to K1.4 trillion due to an expected decrease in development expenditure, especially under the domestically-financed projects
The revised budgets include a K44 million cut from Malawi Human Rights Commission vote, K63 million from the Office of the Ombudsman and K98 million from the Office of the Vice-President.
Treasury allocated K139.4 billion towards financing the development budget, but this has been revised downwards by K27.5 billion.Follow and Subscribe Nyasa TV :