March 23, 2017 by Staff Reporter
The International Monetary Fund (IMF) Wednesday declared Malawi as being on track as far as reclaiming the economy is concerned.
Chief of Mission for IMF, Oral Williams disclosed this in Lilongwe during a press briefing on the end of mission for the ninth and final review of the Extended Credit Facility.
He said as far as the team is concerned Malawi has made tremendous strides in reclaiming its economy which was down.
Williams said, “Malawi’s economy was hit hard by the negative impacts of the drought, but the economic outlook is improving with better prospects of agricultural output including the maize harvest.
“Real Growth Domestic Product (GDP) growth after two consecutive years of drought fell below three per cent in 2016 but is expected to pick up in the range of four to five per cent in 2017 while the annual inflation has now fallen to 16.1 per cent as of February 2017.
“The consumption-lead recovery is expected to be driven mainly by a rebound in the agriculture, wholesale and retail and telecommunications sector.”
Additionally the IMF Chief commended the government of Malawi for the tight monetary policy which kept short term money market rates positive in real terms and stronger fiscal management.
“These short term money market rates were key to restoring confidence in the exchange rate which has remained stable. Committing the flexible exchange rate regime and automatic fuel pricing mechanism continued to help Malawi to respond to external shocks as evidenced by the foreign exchange reserve cover that stabilized at about three months of imports,” William said.
The Chief of Mission has since asked Malawi to spend within the available resources and avoid borrowing to maintain the state of the economy.
Minister of Finance, Economic Planning and Development Goodall Gondwe concurred with the IMF mission Chief saying the economy of the country has renounced and there is room for further improvements.
“Let me thank the people of Malawi for their patience during the time the country was faced with serious economic hardships. As government we will work to maintain the status of the economy by making decisions with patience and possible consultations,” he said.