Firm optimistic on economic upturn
Portfolio and investment advisory management firm, Nico Assents Managers, is optimistic that the local economy would pick up in the second half of the year as Covid cases ease.
Due to the pandemic, most economic activities were almost halted during the greater part of 2020 which led to subdued gross domestic product (GDP) growth of 0.9 percent.
But in its April Monthly Economic Report, the firm, a subsidiary of Nico Group, says the prospects look good as most countries are opening up for business.
However, the report says Malawi’s economic outlook faces considerable downside risks including weather shocks and fiscal slippages.
“The arrival of Covid vaccines and expected good agricultural season harvest, however, project a gradually favorable economic outlook,” the report reads.
Amid the optimism among most firms and industry captains, the Reserve Bank of Malawi sees some of key economic fundamentals remaining volatile in the short term.
It projects that the exchange rate will, for instance, depreciate by about 2.2 percent in the second quarter of 2021.
The underlining assumptions of this projection include the rise in oil and fertiliser prices over the short to medium-term and a fall in maize prices by 14.3 percent to K150 per kilogramme.
The Economist Intelligence Unit projects that there will be no immediate return to normal for Malawi in 2021 as it is lower-income country.
Presenting the 2021/22 national budget, Minister of Finance Felix Mlusu projected that the economy would grow by 3.8 percent in 2021 and 5.2 percent in 2022.
“This is mainly on the assumption that there will be gradual lifting of containment measures and that business will slowly return to normality during the second half of 2021,” he said.
The country’s economic growth was recorded at 0.9 percent in 2020 from a post Covid projection of 1.9 percent.
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.
