10 Sep Malawi sees 5% GDP growth this year and 7% in 2020
Malawi expects its GDP to grow by 5% this year followed by 7% in 2020 as a severe draught that has impacted agricultural production in recent years turns to rainfall.
The Southern African nation’s economic growth has slowed while in the grip of an El Nino-induced drought, which has had an adverse effect on sales of tobacco, tea and sugarcane.
Electricity shortages and political uncertainty also contributed to Malawi’s economic malaise last year, when it was induced to activate a three-year US$112 million loan facility from the International Monetary Fund (IMF).
Finance Minister Joseph Mwanamvekha said in an annual budget speech that the government was battling to curb the budget deficit and a rising government debt stock, which stood at 62% of GDP in December 2018.
The minister said Malawi was on track to remain within the terms of the IMF’s Extended Credit Facility (ECF) programme. An IMF mission team arriving on September 10 for the second and third review will unlock the remainder of about $56 million of the loan, he added.
“External borrowing will be contracted with careful consideration to ensure realisation of value for money,” Mwanamvekha said.