Reserve Bank of Malawi says outlook still mixed, murky
The Reserve Bank of Malawi (RBM) has reiterated its stance that the economic outlook remains mixed as pangs of the Covid pandemic are still being felt, albeit easing.
The central bank says in its operational account report for the year ended December 31, 2020 that the pandemic is still affecting chances for growth as investment and business operations remain uncertain.
In the report, RBM says in light of Covid the group, for instance, continues to be exposed to credit, market and operational risks for its financial activities and it continues to monitor developments and manage the risk associated with these portfolios.
It further says that the impact of Covid on future performance and therefore on the measurement of some assets and liabilities or on liquidity might be significant.
“RBM put in place measures to ensure availability of enough foreign exchange to cushion businesses from foreign exchange rate volatility and the bank reviewed its Business Continuity Plan and several measures were implemented to minimize the potential adverse effects of the spread of Covid,” reads the report.
Recently, the central bank said economic recovery would mainly depend on availability and high uptake of Covid vaccines.
Economic output has been affected by the pandemic with growth recorded at 0.9 percent in 2020. The economy is projected at 3.8 percent in 2021.
Speaking in an interview, Malawi Confederation of Chambers of Commerce and Industry (MCCCI) President James Chimwaza said despite the future looking bleak, with Covid cases easing, chances are the economy is nearing recovery point.
He urged local businesses to help in the fight against the pandemic by advocating high uptake on the vaccine.
Economist from the Malawi University of Business and Applied Sciences Betchani Tchereni said the country should learn to live with the pandemic.
“If we get vaccinated, we will be able to interact and thereby conduct business with ease and hold the economy from collapsing,” he said.
In its recent Monthly Economic Report, portfolio and investment advisory management firm, Nico Assents Managers was however, optimistic that the local economy would pick up in the second half of the year as Covid cases eased.
The firm, a subsidiary of Nico Group, said the prospects look good as most countries are opening up for business.
The Covid pandemic has knocked many economies including Malawi and the only hope is the reduction of cases for the pandemic which still has no cure.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.