‘Fiscal discipline key to economic stability’


Restricted spending and reduced domestic borrowing by the government is key to sustainability of the positive economic outlook currently prevailing in the country, analysts have said.

Economics Association of Malawi (Ecama) executive director, Edward Chilima, and Chancellor College economics professor,

Ben Kalua, said in separate interviews on Friday that the onus is now on the government to stabilise the economy.


“Government must focus on managing its cash books. To manage inflation, there is need to manage both the expenditure and borrowing appetite,” said Chilima.

He said the government still has more work to do to ensure that inflation drops even much further and translates into significantly reduced lending rates which are important to private sector productivity and economic growth in the country.

“It is business friendly lending rates that will help improve productivity and increase the private sector’s input to the economy,” he said.


On his part, Kalua said while the outlook is currently positive with regard to macroeconomic indicators, stability of the same will be determined by the government’s effort to manage the situation.

“Inflation will obviously improve during this [crop harvest] period, but the challenge is how to sustain that beyond the period,” said Kalua.

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