Economic think-tank, the Economics Association of Malawi (Ecama) says the country’s economic strides remained unsatisfactory in the year ending, evidenced by poor performance of most micro-economic indicators.
Ecama Executive Director Edward Chilima told The Daily Times that the Malawi economy remains fragile.
According to Chilima, various shocks faced the economy in the year ending which led to the ever increase in inflation, a hike in borrowing rates as well as continued loss of value in the kwacha, among others.
He said the beginning of 2016 would be premised on these and other challenges facing the economy which would eventually further frustrate the recovery strides.
“We can define 2015 as a year that has been very challenging in terms of the economy of the country. At the beginning of the year, there was a lot of optimism that the economy was going to rebound but this did not materialise,” said Chilima.
He cited, for instance, projections made for a possible stabilisation of the currency, a drop in both interest inflation rates and anticipation that the International Monetary Fund (IMF) programmes to be back on track, most of which could not become visible.
In the year, government projected the economy to grow by about 6 percent, but was revised downwards considering a slow in the private sector activities.
“Through the projections, things were appearing to be recovering. But as the year went on most of those key parameters have been off target to the extent that most of the projection hasn’t come to realisation.
“So I can say 2015 has not been good year and everyone can see that things haven’t been as expected,” said Chilima.
He partly blamed the government continued appetite for expenditure and borrowing which, he said, has in turn also influenced poor performance of the key macro-economic indicator.
He further said the recently launched public sector reforms could not save the situation, saying it hasn’t “moved as fast as we would have wanted.”
“The government has been caught spending beyond budgets, this is not secrete; there is still wastage in the government system. There are still inefficiencies in the government system, so we see the government still borrowing heavily and mostly for consumption and wastage that has put stress on the government budget and on the interest rates,” indicated Chilima.