By Kingsley Jassi:
The Africa Development Bank (AfDB) sees a bumpy 2025 for Malawi while expecting continued volatility of most economic indicators despite maintaining a gross domestic product growth rate of 4.1 percent.
In its 2025 Macroeconomic Outlook for Africa, the bank says Malawi will be among worst performers in the year, with current account deficit expected to be minus 15.8 percent.
This will be the fourth worst after Mozambique’s minus 31 percent, Liberia’s minus 26.9 percent and Burundi’s minus 17.7 percent.
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An economic dash board by the bank on the countries’ performances further shows the 4.1 percent growth rate as moderate performance, ranking the 16th least growth rate in the region.
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The bank has since warned that countries in the region will face deteriorating current account deficits due to worsening shocks on international trade that will trickle to countries like Malawi.
“Africa’s overall current account balance is expected to weaken in the short term, driven by unfavourable prospects in global commodity markets and the cumulative impact of multiple global shocks to trade,” the report reads.
Inflation performance will be the fifth highest in the region at 21.6 percent, with Sudan and South Sudan suffering the highest inflation rates at 74.1 and 43.4 percent, respectively.
The bank has since lamented the slow growth the countries have made in recent years, citing high debt servicing costs, high inflation rates, and weather shocks.
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However, the Southern African region is expected to pick up growth in 2025 to 3 percent from 1.8 percent in 2024 and, in 2026, growth will marginally rise to 3.1 percent.
“This pickup marks the first time since 2021 that the region’s growth has exceeded 2 percent and heavily reflects robust performances in countries like eSwathini, Zambia and Zimbabwe,” the report says.
Malawi’s growth rate of 4.1 percent is expected to be above the region’s average of 3 percent, but the report fell short of recognising it.
The report follows World Bank’s concerns on worsening economic imbalances, expecting expenditure to grow in the election year.
However, there is high expectation of agricultural output, by authorities, as they hope for slow inflation with declined food prices and improved industrial supply deficit.
The report comes at a time calls are growing to employ an economic turnaround strategy that is effective to see economy rebound and shake off the macro economic imbalances.
Africa’s overall current account balance is expected to weaken in the short term, driven by unfavourable prospects in global commodity markets and the cumulative impact of multiple global shocks to trade
