One of the country’s commercial banks, Standard Bank, says the economic outlook remains mixed as pressure on key macroeconomic fundamentals persists.
The Malawi Stock Exchange-listed financial institution paints the picture in its 2021 Financial Statement issued on Friday.
The bank says economic recovery is expected to continue in 2022, driven by rebounds in manufacturing, mining and quarrying, construction, transport and storage, and electricity, gas and water supply.
This augers well with the government’s projection that, in the next 12 months, Malawi would attain a gross domestic product growth rate of 4.1 percent and 4.0 percent in 2023, an average inflation of 9.1 percent, a policy rate of 12.0 percent and tax refunds of 3.0 percent of total tax revenue collection.
However, Standard Bank says pressure on the exchange rate will likely continue on the back of weak foreign exchange supply.
“Upward pressures on inflation rate will likely remain in the first half, largely driven by supply constraints,” the bank says in the report, one of whose signatories is its chief executive Phillip Madinga.
Meanwhile, for the year ended December 31 2021, Standard Bank has announced a four percent growth in post-tax profit to K24.8 billion.
The performance is despite what the bank calls a challenging operating environment where demand for foreign currency continued to outweigh supply.
Standard Bank’s revenue also grew by 31 percent year-on-year driven by growth in both net interest income and non-interest revenue, according to the report.
The bank says its operating costs were 20 percent higher than the previous year, impacted by an increase in prices of goods and services as well as the bank’s investment in information technology in line with its digital transformation strategy.