The size of Malawi’s economy increased by 72 percent in dollar terms from $6.4 billion (or K4.6 trillion) in 2010 to $10.9 billion (or K8.1 trillion) in 2019, following rebasing of the economy by the National Statistical Office (NSO).
Following the completion of the rebasing exercise, NSO has also revealed that the country’s nominal gross domestic product (GDP) for 2017 has been revised upwards by 38.4 percent from $6.4 billion in the 2010 base year to $8.8 billion (K6.4 trillion) in the 2017 base year.
Rebasing of GDP involves replacing the old base year (2010) used in compiling GDP with a more recent base year (2017) for computing constant price estimates.
All over the world, as relative prices and the structure of the economy change over time, economies are generally encouraged to update the base year to correspond with the evolution of prices in the economy and to also improve quality and coverage of their national accounts.
In March last year, Ministry of Finance said many developments were unfolding in the country’s private sector, but were not recorded formally when calculating nominal GDP—the total value of goods and services at prices of a particular year using current market prices.
In an interview yesterday, NSO spokesperson Kingsley Manda said GDP revision drew from major datasets, which include census of economic activities, administrative data from general government, agricultural production estimates, and banking data.
“Following the GDP rebasing, the structure of the economy of Malawi now appears more diversified if you look at individual sectors of the economy,” he said.
With respect to sectoral share of GDP by the year 2017,Manda said the rebasing exercise shows that agriculture led with 23.3 percent followed by wholesale and retail trade service activities (12.9 percent), manufacturing (11.5 percent) and real estate service activities (7.2 percent).
Ministry of Finance spokesperson Williams Banda was not immediately available to comment on the rebasing of GDP.
But economist Thomas Chataghalala Munthali, who is also National Planning Commission director general, said GDP rebasing was a long overdue undertaking as “we were supposed to have done this exercise in 2015.”
He said: “This will be a timely input into the development of the long-term development plan that will succeed Vision 2020.”
An internet search yesterday showed that the country’s nominal GDP at $10.9 billion (about K7.5 trillion) is still one of the lowest national wealth on the continent and in fact, it is five times lower than the size of Tanzania economy which is worth $51 billion (about K45 trillion).
In fact, Malawi’s wealth is almost 35 times smaller than the size of South Africa’s economy, estimated at $349 billion (about K261 trillion).