Experts rue missed economic growth forecasts
Economists have lamented consistent missed growth projections, saying they affect planning for both private and public sectors.
Over the years, fiscal and monetary authorities have missed their envisaged real gross domestic product (GDP) growth rate. For instance, last year, authorities projected the economy will expand by 5.1 percent, but it ended up growing by 2.9 percent.
This year, Reserve Bank of Malawi (RBM) has projected that GDP will grow by six percent, which is contrary to growth projections by Economist Intelligence Unit (EIU) at 3.9 percent, World Bank group 4.2 percent and International Monetary Fund (IMF) 4.5 percent.
In a response to an e-mail, Malawi Economic Justice Network (Mejn) executive director Dalitso Kubalasa said the missed projections paint mediocre and unpredictable policy impressions, fanning lack of policy coherence and confidence.
“They, unfortunately ,end up being extremely counterproductive to the ideal healthy and predictable policy environment that is supposed to aid planning and business decisions by both the public and private sector,” he said.
Catholic University head of economics department Gilbert Kachamba said the disparities in growth projections and the actual growth are not good for planning purposes, especially where the difference between the projected growth and the actual growth is too big.
He urged prudence in projections and findings, saying a true picture of the situation will help to come up with right responses equal to the magnitude of the problems at hand.
Chancellor College economics professor Ben Kaluwa said when people put faith into forecast it does not work and affects planning because plans are supposed to be made on realism.
The economists agree that there is hope for good economic activity in 2017 owing to what might be a good harvest season and expansion of the agricultural sector, which currently contributes about 30 percent to GDP.
