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Manufacturing to jump in 2017

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The Reserve Bank of Malawi (RBM) says it expects strong growth in the manufacturing sector buoyed by a strong performance in the agriculture sector.

Manufacturing grew by two percent in 2016 as compared to 3.8 percent registered in 2015, dampened by reduced export demand for processed tea and sugar following the unfavourable weather conditions experienced domestically in 2016.

But in its fourth quarter economic report for 2017, RBM says the industry is projected to grow by 5.3 percent on the assumption that the agricultural sector performance will be favourable.

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The agriculture sector is expected to pick up by 5.9 percent in 2017 from a negative growth of 0.1 percent in 2016, owing to prospects of favourable weather conditions.

The central bank further says it expects the construction sector to grow by 5.4 percent in 2017 up from 3.2 percent in 2016, on the assumption that government will increase investment in physical infrastructure.

Construction registered a slow growth last year as the industry grew by 3.2 percent in 2016 compared to 3.5 percent in 2015.

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“The decline in growth was explained by delays of public investment in infrastructure which accounted for a larger proportion of the construction industry,” RBM said.

According to RBM, mining and quarrying activities are expected to swell by 1.6 percent on the assumption of the entry of Malawi into the international Extractive Industries Transparency Initiative through improved governance of the extractive industry as well as the issuance of new licences.

Last year, the sector registered a minimal growth of 0.4 percent compared to a growth rate of 1.1 percent registered in 2015.

Presenting the 2017/18 budget, Finance Minister Goodall Gondwe said the economy could register an increased growth rate of between 5-6 percent in 2017 and thereafter, depending upon good weather conditions, a resumption of robust economic growth rates is likely.

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