Malawi’s economy continues to defy the odds under President Peter Mutharika with new predictions by the International Monetary Fund signalling further positive outlook and robust trends in the economy.
This is yet another Vote of Confidence in President Peter Mutharika’s sound economic management measures which have lifted the economy out of crisis it was in 2014 to the path of recovery and robust growth.
The IMF has predicted that Malawi’s inflation shall remain in the single digit in 2018. IMF has further predicted inflation to fall down to 5 percent in the medium term, which will be the lowest inflation fall ever.
In addition, the IMF has predicted economic growth to go up to 7 percent. This will keep Malawi’s economy as one of the top performing economies in Southern Africa.
The IMF authoritative predictions means Malawi’s economy is firmly studded to be one of the fastest growing economies few years after the Mutharika government salvaged it from a crisis.
The swift recovery of the economy have made others to describe Malawi’s economy as ‘a miracle’.
In a statement released after a week-long assessment of the economy, the IMF Mission for Malawi notes the positive strides in the economy.
“Malawi’s economy continues to grow while inflation remains on a declining trend. Moderate economic growth is likely to strengthen to about 4 percent in 2019, followed by a rise to 6-7 percent over the medium term,” reads.the statement by the IMF led by Pritha Mitra.
The IMF further acknowledges Malawi’s positive performance in its program, to the extent of “significantly overperforming” in some sectors.
“Performance under the program has been good. Most quantitative performance criteria (QPC) for end-June were met, with the criteria on international reserves and the Reserve Bank of Malawi’s holdings of government securities significantly overperforming,” observes the IMF.
The Bretton Woods institution also hails the Government’s monetary policy management measures to keep inflation down and efforts aimed at ensuring that prices of commodities remain stable.
“The RBM’s (Reserve Bank of Malawi) vigilance and adoption of new regulatory measures has resulted in a significant reduction of non-performing loans and increased provisioning,” it says.
This means there is now reduction in default in loans such that lending institutions are now able to cut on sums they would need to set aside to deal with loan default losses.
The IMF assessment is a positive rating to President Peter Mutharika’s economic management measures.
In 2014,.Mutharika inherited an economy that was badly battered by Cashgate and Malawi was on the verge of bankruptcy as its deficit was almost equal to national budget.
At that time, growth stagnated at 2.4%, inflation was at 24% and the local currency was volatile with businesses struggling with insufficient forex import cover.
The withdrawal of budget support by donors in reaction to Cashgate put the economy under futher strain.
A year into government, Malawi suffered floods and famine. This was followed by a severe drought in the second year of the administration.
These factors regardless, Mutharika has streered the economy out of the doldrums, making it one of the best performing in Southern Africa in 2017.
IMF has consistently given Malawi a positive rating since 2016.