MCP says Malawi economy on life support despite inflation rate down to 8.3%

Malawi  economy remains on “life support” and has deteriorated despite government projecting  a rosy picture,  opposition Malawi Congress Party (MCP)  member of parliament for Lilongwe North, Patricia Mkanda has said.

In response to President Peter Mutharika’s speech during the opening of the 47 session of parliament, the Lilongwe North MP said  the country’s economy is in the doldrums and that extreme measures will be required to address the “ depressing” situation for Malawians.

President Mutharika in his address cited the decline in inflation and interest rates as an indication of economic stability.

But  Mkanda said  the President  failed to mention the real GDP (growth domestic product) growth in the past two years which on average were below 2.5 percent.

Mutharika only cited a projection of 5.5 percent, whose realisation has already been threatened by the unprecedented power shortages and low farm produce prices.

“Malawi economy is on life supporting machine,” said Mkanda.

She said with the impoverished state, more Malawians are being driven out of the country as “ economic refugees”  in foreign countries mostly  South Africa.

The MCP legislator said instead of  claiming  economic stability, government need a well-conceived, timely, resolute and consistent policy response to precarious situation.

She  said it is good for the President and the leadership to find new ways of improving the country’s economy as the current interventions have failed the country

Leader of opposition and MCP president Lazarous Chakwera  also said while the President struts about reductions in the digits of the economy’s inflation and interest rates, Malawians are wrestling monthly with serious reductions in the digits and value of their income and revenue.

“Despite the debatable claims that the stability of the currency proves that all is well, one undebatable sign that Malawians are earning less and less is the fact that the Malawi Revenue Authority which collects taxes on what Malawians are earning in real terms missed its targets two months in a row, July and August 2017,” he said.

“And when you look at the situation with our young people, the picture is quite grim and explains why our earning power as a nation is deteriorating. Young people cannot earn an income if they are not employed, but not only are millions of them unable to find jobs, but so many who had jobs are being laid off by companies that are downsizing to survive President Mutharika’s business-killing economy, such as construction companies that have stopped hiring in the wake of a severe cement shortage on the market,” he said.

Meanwhile, figures from the National Statistical Office (NSO) show that Malawi’s year-on-year inflation rate for October 2017 has dropped by 0.1 percentage points to 8.3 percent from the previous month’s 8.4 percent.

The minimal drop could be a reflection of the increase in non-food inflation by 0.1 percentage points to 11.7 percent in October from the previous month’s 11.6 percent, according to NSO.

This shows that the drop in food inflation by 0.3 percentage points from 5.1 percent to 4.8 percent did not have an impact on the drop of inflation in October.

Food has a huge weight at 50.1 percent in the Consumer Price Index (CPI), a measure that examines the weighted average price of a basket of consumer goods and services.