The Reserve Bank of Malawi (RBM) maintains that the local economy will still swell by 3.8 percent in 2021 albeit pessimism among some experts who feel the Covid pandemic effect is still eminent and will weigh heavily on growth prospects.
The central bank’s stance comes at a time key macroeconomic fundamentals remained volatile.
The Kwacha, for instance, was seen losing grip against the United States (US) Dollar and other currencies, trading at K823.48 to the US Dollar.
Inflation was also reported to have been on an upward spiral, rising by 0.5 percentage points in September 2021 to 8.9 percent.
In a recent exclusive interview, RBM Governor Wilson Banda, however, expressed optimism that, amid all the challenges, the economy would grow as earlier projected.
“The efforts that we have put in place will bear fruits next year and beyond and the economy is going to make a turn around and we, as a central bank, are going to play our part. And I want to assure people that poverty will be history,” he said.
Earlier, when presenting the 2021-22 National Budget to Parliament, Finance Minister Felix Mlusu projected a real gross domestic product growth of 3.8 percent this year and 5.4 percent in 2022.
In its World Economic Outlook published last week, the International Monitory Fund (IMF) said economic prospects remained mixed.
The Britton Woods institution attributed the foggy outlook to the uncertainty that surrounds the Covid pandemic, which is yet to be over.
Economics Association of Malawi Executive Director Frank Chikuta said the country’s slow uptake of vaccines may slow down the opening up of the economy.
“If the slow uptake persists, then one would expect that economic activity will not open up sooner and that would also have an effect on the level of production,” he said.
University of Malawi Economics Lecturer Jacob Mazalale Wednesday said the outlook remained mixed and murky due to the pandemic.
“The negative performance of key economic indicators will feed into economic growth prospects and might constrain growth,” he said.
Meanwhile, the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has said the economy will pick up going forward owing to a drop in Covid cases in the country.
MCCCI President James Chimwaza said this could lead to resumption of economic activity which will propel growth.
In a separate interview, National Association of Small and Medium Enterprises President William Mwale said there has been an improvement on the market with the movement of goods and services between Malawi and other countries.