The local economy is expected to grow marginally by 3.1 percent in 2020, lower than the 5.5 percent projected earlier by the government, sources at the Treasury say.
The drop in Malawi’s Gross Domestic Product (GDP) is attributed to effects of Covid-19 that has put most other global economies at a standstill.
However, in a telephone interview Friday, Treasury Spokesperson, Davis Sado, could not confirm the 3.1 GDP output figure but said the estimates have been revised downwards.
He said an official announcement will be made soon with precise figures.
“Indeed we have done a review and growth has been affected, it has gone down. Heavily affected are sectors such as tourism, manufacturing, wholesale and retail, transportation and education.
“There is a lot of uncertainty and equally banks are being cautious on issuance of loans so there is a general outlook that growth has gone down and depending on when the situation will be contained the growth prospects will continue going down,” Sado said.
The International Monetary Fund (IMF) and the World Bank have also indicated that they are reviewing the local economy’s growth prospects amid rising Covid-19 cases.
This comes after the country recorded eight cases and one death.
Initially, the Bretton Woods institutions projected the local economy to swell by 5 percent this year.
World Bank Country Manager, Greg Toulmin, said the bank is reviewing the situation.
“We are exploring with government the [possible] economic impacts of Covid-19 on Malawi. But we don’t have any specific projections yet,” Toulmin said.
IMF resident representatives, Farayi Gwenhamo, said that review process for the outlook is currently underway and the fund will share the outcome in due course.
The IMF in its recent statement at the end of Extended Credit Facility review meetings indicated that over the medium-term, growth may rise further to 6 and 7 percent.
This is backed by infrastructure that is more resilient to shocks from climate change, improved access to finance, crop diversification, and an improved business climate.