Economic outlook still mixed— Reserve Bank of Malawi


The Reserve Bank of Malawi (RBM) says the economic outlook remains mixed but with elevated chances of a positive outturn in most key macroeconomic fundamentals.

The central bank said this in its 2023 first Monetary Policy Committee (MPC) report released on Monday.

RBM maintained its real gross domestic product (GDP) forecast at 2.7 percent in 2023.


The central bank says it remains committed to the medium-term inflation objective of 5.0 percent with a symmetric band of 2.0 percentage points.

It expects subdued pressures on imported inflation. It also predicts stability in domestic fuel pump, electricity and water tariffs.

However, RBM anticipates domestically-produced food prices to remain elevated as the lean period peaks in the first quarter of this year, continued pass-through of exchange rate depreciation, and fiscal slippages to persist.


“Whilst acknowledging that further policy tightening was necessary to speed up the return of inflation to the growth-enhancing single-digit rates, the MPC found it prudent to hold on to the previous monetary policy decisions to allow time for the global price shocks to abate,” the report reads.

Delivering the State of the Nation Address, President Lazarus Chakwera admitted that the economy remains volatile as a result of the country not producing enough to meet its revenue needs for domestic consumption and foreign exchange generation.

“Restructuring our economy to be productive enough to create wealth, create jobs and achieve food security in order to move our country towards becoming a low-middle-income economy is the urgent task at hand and remains my administration’s top priority,” he said.

Economist Exley Silumbu said the assumptions might be concrete enough to warrant the notion that the economy will still grow but that for an economy such as Malawi, such growth is not as exciting.

He indicated that the economy needs to be growing with higher margins not only for the current benefits but for long-term gains such as achieving the Malawi 2063 blueprint.

“There is something wrong with this economy because its growth does not reflect with the growth per capita which we need to be aiming at as well if we are to make life easy for the majority,” he said.

Since the Covid pandemic, the economy has been growing at an undesirable rate and now the after effects of the pandemic have been compounded by the war Ukraine.

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