Minister of Finance Sosten Gwengwe has said a quick return to the International Monetary Fund (IMF)’s Extended Facility Programme remains the government’s priority.
In a response to a questionnaire recently, Gwengwe said the country should be bold and decisive to walk the growth path, and that support from the fund remains pivotal.
“The economy needs realignment in a few pressure points. It is a difficult and painful process but for the love of our country, we will all need to hold hands and pull through.
“The inflation squeeze is also affecting the region and indeed the global economy. When you hear that Spain is experiencing double-digit inflation, then you know that the situation is dire. We are trying all we can to be as resilient as possible by limiting imported inflation,” Gwengwe said.
But IMF Country Manager Farai Gwenhamo maintains that engagements between Malawi and the fund are ongoing with a great momentum registered.
This is coming at a time economic experts have tipped Malawians to brace for tough times as inflation remains elevated, pushing the cost of living up.
In an interview, economist Thomson Kumwenda said the country will continue to experience high inflationary pressures due to a number of factors including persistent high fiscal deficits that mounts pressure on interest rates in the domestic economy as a result of heavy domestic borrowing.
He added that challenges faced in the agriculture sector in account of severe cyclones that battered the farming community and also challenges of the Affordable Inputs Programme (AIP) administration in the 2021-22 season, point to inadequate prospective harvest.
“…then comes the increase in fuel, fertiliser prices and the prospective challenges in 2022-23 farming seasons due to global supply shortages of key farming inputs, such as fertiliser, chemicals. All these are coupled by challenges in domestic production of basic daily key usable items for average Malawians such as cooking oil, washing soap, among others,” Kumwenda said.
In the 2022-23 national budget, the government projected that the economy will grow by 4 percent in 2022.