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IMF maintains Malawi’s growth projection

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The International Monetary Fund (IMF) has maintained that the local economy will continue on a gradual recovery path in the short to medium terms.

The fund has projected inflation at 6.8 percent in the medium-term.

This is contained in the IMF Country Report No. 21/269 published recently.

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It further indicates the economy is expected to rebound by 4.5 percent by 2023 on the assumption that external financing from Region Development Banks (RDBs) will continue.

“This outlook depends critically on a sustained increase in public investment relative to levels experienced in the past decade with strong fiscal multipliers of public investment, the maintenance of a fiscal deficit on the order of 10 percent of gross domestic products (GDP) over the medium term and continued access to sizable and further growing RDB financing as well as domestic borrowing to cover large financing gaps in spite of unsustainable debt,” it says.

Malawi University of Business and Applied Sciences-based economist Betchani Tchereni said there was room for the economy to grow beyond IMF’s projections.

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“The assumptions being made are that the economy will continue to be agrarian. If the SERP feeds well into the MIP- 1, our economy can grow even better,” Tchereni said.

In a separate interview, Director for Centre for Research and Consultancy Milward Tobias said it was difficult to read anything from the predictions as previous projections were far from reality.

“The understanding is that the projections are based on scientific modelling; so, one can only dispute with alternative modelling results,” he said.

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