Sector growth projections to be reviewed March

Ministry of Finance, Economic Planning and Development has said it will review growth projections for this year next month.

On Friday, Finance Minister Goodall Gondwe provided rough estimates of expected growth to Parliament in his Mid Year Budget Review statement.

In a written response to a questionnaire, the ministry’s spokesperson Davis Sado said that while the initial projections for 2018 growth as per September 2017 assessment was at 6.0 percent, the projections will be reviewed in March after analysing economic factors on the ground.

“The 2017 growth projections were revised from the initial 5.6 to 6.4. In March this year, we will be able to come up with actual growth for the year 2017.

“As for initial projections for 2018 growth, were as per September 2017 assessment, at 6 percent, but the growth projections will have to be reviewed in the March 2018 assessment after analysing economic factors on the ground,” he said.

On Wednesday,  the International Monetary Fund (IMF) said they expect the economy to grow between 3 and 5 percent in 2018 and by as much as 7 percent in the medium term as the country recovers from drought-induced stagnation.

“Growth will be supported by enhanced infrastructure investment and social services as well as an improved business environment,” the international lender said in a statement at the end of a country mission that included meetings to discuss the extension of a multi-million dollar loan.

Malawi has a total public debt of $3.50 billion, with about a third of that in external debt.

Apart from struggling with debt, there are also fears over growth prospects following combined effects of persistent power blackouts, dry spells and armyworms attack that could shutter growth prospects.

The current drought is estimated to cut maize production by 40 percent or 210 740 tonnes while fall armyworms would cut output by 10 percent or 73 201 tons.

In an earlier interview, Centre for Social Concern (CFSC) economic governance programme officer Lucky Mfungwe said the projected growth rate is too optimistic unless strategies were put in place to take care of climate change effects.

“The growth rate would hardly be reached in this context as agriculture alone is a major contributor to the country’s GDP. In addition, the dry spells may lead to hoarding of maize which would be one of the factors to push maize prices up,” he said.