Covid-19 undermines growth prospects—Nico Asset
Investment and portfolio management firm Nico Asset Managers says Malawi’s economic outlook faces downside risks due to the impact of the Covid-19 pandemic, low vaccine uptake, vaccine shortages and fiscal slippages.
In its 2021 mid-year economic report published on Wednesday, the firm said sluggish vaccine availability and uptake will continue to necessitate social distancing policies and perpetuate risks of new waves of infection, which will weigh on growth in the services and industry sectors.
Reads the report in part: “As a result, Malawi continues to remain on the red list for most travellers impacting the aviation and tourism industry.
“Although easing restrictions has improved domestic tourism, there is a possibility that new restrictions will continue to hamper the services sector.”
Taking into account these factors, the firm says gross domestic product is likely to be lower than government’s projections.
The firm is, however, upbeat that the agricultural marketing season projects a gradually favourable economic outlook in the short to medium term.
Meanwhile, government has revised upwards its forecasts for the country’s economic growth from 3.5 percent to 3.8 percent in 2021.
The International Monetary Fund and Economist Intelligence Unit have also pegged growth at 2.2 percent and 2.3 percent respectively while the World Bank’s growth projection for Malawi stands at 2.9 percent.
University of Malawi economics lecturer Ben Kaluwa in a recent interview with Business News however indicated that the impact of Covid-19 may not be as bad as last year considering that the economy is now dealing with something they know.
Meanwhile, Reserve Bank of Malawi has indicated that in terms of the risks to the growth outlook, fundamental uncertainty around the evolution of the pandemic remains a key factor shaping the economic outlook.
