IMF predicts weaker growth next year
The International Monetary Fund (IMF) has predicted that the local economy would swell by 5.1 percent next year.
The prediction is 1.9 percentage points shy of the 7 percent Finance Minister Joseph Mwanamvekha predicted in the 2019/20 national budget.
In its latest World Economic Outlook for October released during the IMF/World Bank annual meetings in Washington last week, the IMF has further predicted the local economy to swell by 6.5 percent in 2024.
Impoverished Malawi needs at least an average growth rate of six percent per annum to maintain its poverty levels and anything above six percent to bring poverty down.
The economic outlook says Malawi’s economy to grow by 4.5 percent this year which is 0.5 percentage points shy of the five percent prediction by Mwanamvekha.
The local Chancellor of the Exchequer had argued that the local economy would register accelerated growth this year and next year on the account of favourable weather conditions during the last growing season and the consequent spillover effects to other sectors in the economy.
He added that the Zambia-Malawi power interconnection project had stabilized the country’s power supply since the beginning of 2019.
Malawi’s economic performance has remained volatile over the past 10 years, ranging from 2.1 percent in 2012 to 6.2 percent in 2014 before coming down to 2.7 percent in 2016 and rising again to 5.2 percent in 2017.
In 2018, the local economy grew by 3.2 percent.
Mwanamvekha could not be reached for a comment on the IMF prediction for 2020.
Variations in economic growth prospects for Malawi has been raising debate, with commentators also wondering if the country has been doing enough towards attaining long term sustainable growth.
Malawi has registered an average 3.5 percent economic growth in the past five or so years, a rate not enough to bail it out of its current poverty levels.
Malawi is vying with the likes of Burundi, Niger, the Democratic Republic of Congo and the Central African Republic to be officially the world’s poorest country in terms of per capita income, which was under $500 (in real terms) in 2018.
In a recently issued Paper titled ‘Malawi’s May 2019 Elections; The Need to Align Politics and Policy with the People’s Needs,’ head of Johannesburg-based Brenthurst Foundation, Greg Mills, said if Malawi were to reach lower middle-income status ($996 currently) it will have to grow its economy at an average of 13 percent for the next 10 years, or 6 percent for 30 years.