Malawi Finance, Economic Planning and Development Minister Goodall Gondwe has said there is need for both fiscal and monetary policies to match if Malawi’s economy is to achieve balanced growth in the coming years.
Gondwe made the call Friday in Mangochi when he opened a day-long monetary and exchange rate policy conference for economists, key players in the business sector, development partners and members of the academia.
“If fiscal and monetary policies are moving side by side, then balanced growth should take place,” he said.
Monetary policy is a process by which a monetary authority, usually a central bank, controls the quantity of money in circulation for purposes of attaining stability and economic growth objectives of an economy.
On the other hand, fiscal policy entails use of government revenue collection and expenditure to influence macroeconomic conditions.
“We do not want fiscal policy to over-burden monetary policy and likewise, monetary policy should not be an impediment to economic activity,” he added.
Gondwe said the Democratic Progressive Party (DPP) government’s objective is to grow the economy by an average of 7.5 percent by 2019.
He also said by then, Malawi’s exports should have doubled and poverty reduced.
The minister said government envisions reducing the number of people living below the poverty line threshold of $1.25 (roughly K412) a day to around 30 percent from the current 50 percent of the entire population.
“We want to be in a position where economic growth and poverty reduction will progress in tandem,” he added.
Gondwe, however, challenged participants to desist from being too theoretical and obsessed with economic text-books, but rather be practical if Malawi is to achieve economic stability.
Earlier, Reserve Bank of Malawi (RBM) Governor Charles Chuka said the conference will help enhance RBM’s accountability to the public in the way it conducts its monetary and exchange rate policies.
The conference would also help economic experts share experiences on monetary and macroeconomic stability, among others, said Chuka.