There are variations on the gross domestic product (GDP) growth outlook for 2024 for Malawi, with projections from various institutions including government entities ranging between 1.5 percent and 3.3 percent.
For instance, the Reserve Bank of Malawi (RBM) estimates that the economy would swell by 3.2 percent in 2024, down from 1.5 percent in 2023.
The central bank says the growth estimate is anchored by strong growth in construction and manufacturing.
However, in its recent Monetary Policy Committee statement, RBM observed that the projection is subject to downward adjustment due to the impact of the El Nino weather conditions on agricultural production, and underperformance of the export sector.
The Treasury estimated that the economy would swell by 3.2 percent on the back of resumed direct budget support after Malawi secured an International Monetary Fund (IMF) Extended Credit Facility last November.
But the World Bank projects a GDP growth of 2.8 percent for Malawi in 2024 from 1.6 percent in 2023.
It says the projected economic outturn is primarily due to a modest easing of global commodity prices, a moderate improvement in agricultural production, and increased output bolstered by improved foreign exchange inflows.
Over the medium term, the Bretton Institution says, economic growth is forecast to grow moderately, supported by the announced macroeconomic reforms to address the country’s economic challenges.
On the other hand, the IMF sees Malawi’s real GDP growth rising to 3.3 percent this year from a 1.6 percent growth projection of 2023 because of the [ECF] programme of macroeconomic adjustment and reforms to be implemented in the year.
Oxford Economics projects Malawi real GDP growth for 2024 at 3.1 percent (from 1.9 percent in 2023) due to stronger private and government consumption, which is expected to accelerate the growth rate compared to last year.
The Economist Intelligence Unit, a research and analysis department of the Economist Group, expects real GDP growth for Malawi to be 1.5 percent in 2024 following growth averaging 1.2 percent in 2022 and 2023.
The African Development Bank (AfDB) said in its latest bi-annual Africa Macroeconomic Performance and Outlook Report that it expects the Malawi economy to grow by 3.5 percent in 2024.
The projection higher than the 2.0 GDP growth estimates the regional lender made for Malawi for 2023.
This comes as the local economy has largely been volatile and faced with myriad challenges. Malawi has been affected by a series of shocks—both natural and exogenous— including an outbreak of cholera and Cyclone Freddy lately.
In its Monthly Malawi Economic Report issued last week, local investment and advisory firm, Bridgepath Capital said El Nino-induced drought conditions, which will lower the agricultural sector’s output, are expected to undermine growth.
“The Malawian economy has continued to face several significant risks that include but are not limited to public debt status, weather-related shocks, inflation, reliance on aid and currency depreciation.
“These risk factors may limit the country’s potential for growth and worsen poverty,” reads the Bridgepath Capital report.
But Minister of Finance Simplex Chithyola Banda expects steady growth of the economy amid the structural challenges.
When presenting this year’s budget to Parliament, Chithyola banda said the projected superior performance is attributed to large-scale mega-farm output and anticipated high growth in construction, manufacturing, information and communication, and accommodation and food services.
In the past three years, Malawi economy has had an annual growth rate of not more than two percent.
By 2030, just about six years away, Malawi aspires to become a lower middle-income economy in line with aspirations embedded in the MIP-1.
To hit the middle-income mark, Malawi needs to be growing by at least six percent per year for over 10 years.
