Firm laments Covid-19 impact on GDP growth
Investment management and advisory firm, Alliance Capital Limited, has said there is too much uncertainty on economic growth prospects for the country due to effects of Covid-19 pandemic.
In its April Monthly Economic Report, the firm says the economic outlook was positive before the outbreak but Covid-19 has drastically altered the projections.
This comes as the International Monetary Fund (IMF), recently slashed Malawi’s Gross Domestic Product (GDP) growth rate for 2020 from five percent to 1 percent.
The firm said the outturn will further be dependent on how the government will manage spillover effects of the pandemic which is throwing the global economies into recession.
“The actual outturn, however, is dependent upon the speed with which the outbreak is fully contained across the globe and economic activity returns to normal and how well the Reserve Bank and the government will mitigate the adverse impact on the economy,” reads part of the report.
It further says the trajectory of inflation in the near-term is likely to be driven by the pace of reversal of food prices and the slowdown in momentum of some of the nonfood components of inflation especially transport.
Treasury Spokesperson, Williams Banda, Tuesday, conceded that growth prospects for this year and beyond remains mixed and murky.
“The pandemic has affected the economy but we are currently receiving contributions that will help us to formulate the fiscal status of our economy and using those statistics, we will be coming up with the mitigating measures that will be used against the impact of the pandemic,” Banda said.
The global economy is projected to contract sharply by –3 percent in 2020, much worse than during the 2008– 09 financial crisis.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.