For breaking news and analysis on Malawi and other stories of interest that impact on Africa

Malawi: IMF says economy to slowdown to 1.9 pct this yr

The IMF has revised its growth forecast for Malawi for 2012 to 1.9 percent from 4.3 percent, saying a slowdown in manufacturing and agriculture has hit Malawi

IMF mission chief Tsidi Tsikata, after a two week review in Malawi, said in Lilongwe that the exogenous shocks have created a more challenging environment than expected when the extended credit facility arrangement was done with Malawi.

 “Real GDP growth is estimated to have slowed from 4.3 percent in 2011 to 1.9 percent in 2012 mainly due to contraction in output in the agriculture and manufacturing sectors,” Tsikata said during a news conference in Lilongwe.

This is the slowest growth in over a decade for the southern African country which in the last five years have grown at an average of 7 percent buoyed by bumper harvests.

He said that Malawi government currently faces enormous challenges like the continuing depreciation of the exchange rate, rising inflation and unforeseen difficulties in the implementation of of social protection programs.

“The mission discussed the scope of tightening monetary and fiscal policies to stabilize the exchange rate and contain inflation,” he said.

Soaring food prices have in recent months pushed inflation to 28.3 percent far higher than the forecast of around 18 percent for calendar year 2012.

And tobacco earnings  have fallen in recent years from US$416 million in 2010, to US$292 million in 2011, and US$177 million this year – a development that puts Malawi needing more donor aid than ever before.

Tagged as: , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 7,913 other followers

%d bloggers like this: