Minister of Finance Goodall Gondwe says the government will continue to implement stringent budgetary adjustments and ensure that fiscal and monetary policy coordination is strong as part of efforts to restore economic vitality in the country.
A Chancellor College economics professor has, however, called on the government to just venture into serious action and stop talking.
In a statement issued in Lilongwe, Gondwe said the government continues to reduce domestic borrowing in consultation with the IMF and expressed optimism that the economy could start to recover soon, especially if rains will continue to fall.
“I am encouraged by recent trends in inflation which point to the slowing down of nonfood inflation, giving hope that interest rates may be reviewed at some point soon. All this shows the effectiveness of ongoing fiscal and monetary measures,” said Gondwe.
He said he was happy with measures being undertaken by the Reserve Bank of Malawi (RBM) to mitigate pressures on the kwacha.
Gondwe has since urged Malawians not to panic but to be hopeful, saying the kwacha will soon start to stabilise.
“The government has noted with concern the recent sharp drop in the value of the kwacha and its impact on the lives of Malawians as well as on the business community,” said Gondwe.
He said Malawi’s economy continues to show resilience and that the country continues to meet its international obligations.
“Foreign exchange reserves have never been better, especially taking into account the loss of donor and direct budget support,” said Gondwe.
Commenting on Gondwe’s statement, Chancellor College economics professor Ben Kalua said its high time the government and the country as a whole stopped talking but get into serious action such as increase of production of export goods.
“We need to double our export earnings through diversification. At first we used to have traditional exports such as groundnuts but we no longer have those. Up to when are we going to wait to be told what to do instead of getting into full action?” wondered Kalua.