‘MW TO SURVIVE GLOBAL ECONOMIC SLOW-DOWN’
Minister of Industry and Trade Sosten Gwengwe says Malawi will not be greatly affected by the global economic slow-down because it mostly trades within the Southern Africa Development Community (Sadc).
Gwengwe, in an interview with Business News, was reacting to the trimming of global economic growth by the International Monetary Fund (IMF), the fifth since early last year.
The global lender says global growth is now projected at 3.1 percent for 2013 and 3.8 percent for 2014, a downward revision of ¼ percentage point compared with the April 2013 World Economic Outlook (WEO) forecast, suggesting the bumpy recovery from the global financial crisis may continue.
IMF has trimmed its growth forecast for 2013, after initially projecting that the global economy would expand by as much as 4.1 percent this year.
In its mid-year health check of the world economy, the IMF has also warned that global growth could slow further if the pull-back from massive monetary stimulus US triggers reversals in capital flows and crimps growth in developing countries.
But Gwengwe said Malawi could have been greatly affected if it were exporting most of its produce to other countries which are experiencing economic slowdown such as China and Brazil.
“If you check the growth rate for Africa, we are not as bad as other emerging economies and our major advantage is that we are also trading regionally within Sadc and this gives us a chance to survive the economic downturn,” he said.
Gwengwe said Malawi and the rest of African countries should focus more on trading within the continent because many countries are showing signs of improving beyond predicted proportions.
The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) president Mathews Chikankheni agreed with Gwengwe that Malawi will not feel the effects of the slow economic growth because it is not a major player on the world economic market.
“I feel that as a country we will not feel the pinch because we are not a major player in the world economy. If anything, we might see that other countries who normally give us aid might reduce the amount of money they normally assist us with due to the slow growth,” he said.
Chikankheni said Malawi has an advantage because most of its trading partners are within the Sadc region and this gives it an edge to survive any economic shocks.
The Washington-based lender said it underestimated the depth of the recession in Europe and did not expect the United States (US) to go ahead with growth-stunting spending cuts.
Emerging markets, which had previously been the engine of the global recovery, added to the overall subdued picture in the latest outlook, entitled ‘Growing Pains’.
The IMF cut its 2013 growth forecast for developing countries to five percent, including a lower forecast for the BRICS countries comprising Brazil, Russia, India, China and South Africa.
