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Reserve Bank of Malawi chief sees strong economy in 2019

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By Taonga Sabola:

Reserve Bank of Malawi (RBM) Governor, Dalitso Kabambe, has said he expects the local economy to be more vibrant in 2019 than 2018.

Kabambe told reporters on the sidelines of the launch of the Microfinance Hub, National Switch and Malawi Stock Exchange Automation in Blantyre on Monday that the heavy cloud that hovered above the economy is now behind us.

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The RBM chief said, unlike 2018 when the economy started the year with many obstacles, the pathway appears to be a bit clearer in 2019.

He said the economy started 2018 with threats from various fronts such as a dry spell and fall armyworm attack which chocked food production.

Kabambe added that the authorities foresaw rising electricity and fuel prices at the beginning of 2018.

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This, he said, forced the monetary authorities to be cautious in their policy decisions.

But, according to Kabambe, Malawi is starting 2019 with completely different circumstances to those of 2018.

“The country has started receiving good rains in almost all the districts and chances are that we may have a good harvest this year if the rainfall pattern continues.

“Again, unlike last year, we don’t see a significant jump in electricity prices because a big proportion of the 30 percent power hike approved by the Malawi Energy Regulatory Authority was implemented last year. That means we have about two years to implement the remaining 10 percentage points hike,” Kabambe said.

He added that, looking at the international oil market, RBM does not see a sharp rise in the price of petroleum products this year as was the case last year.

The RBM boss said the only major threat to the economy could come from fiscal slippages due to increased election spending.

“But talking to our colleagues in the Ministry of Finance, there are assurances that they will stick to budgeted spending,” Kabambe said.

Finance Minister, Goodall Gondwe, said the fiscal authorities are committed to spending within the budget in 2019.

Gondwe said it is the wish of Treasury to ensure that whoever wins the May 21 elections inherits a vibrant economy.

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