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IMF maintains 1% growth for 2020

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The International Monetary Fund (IMF) has maintained that the local economy would grow by one percent this year.

The forecast, if it materialises, would mean the local economy may not slip into a recession as previously feared.

In its June 2020 Regional Economic Outlook for Sub- Saharan Africa released last week, the IMF pegged Malawi’s Gross Domestic Product (GDP) for 2021 at 2.5 percent.

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In a statement, IMF says the Covid-19 pandemic continues to represent an unprecedented health and economic crisis, with costs that will be felt most keenly by the poorest segments of the world’s population.

“This is a fast-moving crisis” said Abebe Aemro Selassie, Director of the IMF’s African Department.

“And recent developments suggest that the downturn will be significantly larger than we had anticipated only 10 weeks ago.

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“Given the region’s already-stretched healthcare capacity, the immediate priority is still to protect lives and to do whatever it takes to strengthen local health systems and contain the outbreak,” Selassie said.

He added that on economic policies, sub-Saharan African countries have acted swiftly and aggressively to support the economy.

Selassie said monetary and prudential policies have been eased, with countries adopting a mix of reduced policy rates, added injections of liquidity, greater exchange-rate flexibility, and a temporary relaxation of regulatory and prudential norms, depending on country circumstances.

Recently, the government said it was working on two scenarios the first of which assumes that Covid-19 would ease by September 2020 while the other one, which is a worst case scenario, assumes that Covid would ease by December 2020.

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