The African Development Bank (AfDB) has projected that Malawi’s economy will grow by two percent in 2023, a rebound from the previous year’s 0.7 percent growth.
While this could entail better economic conditions for the economy than in the previous year, AfDB, in its 2023 Southern Africa Economic Outlook said the outlook is uncertain because the region remains subjected to significant downside risks, including more persistent inflation, currently at 27 percent in Malawi.
Reads the outlook in part: “Environmental challenges hamper inclusive growth and food security and exacerbate existing social and political tensions. Weak institutional capacity of most countries—notably Madagascar, Malawi, Mozambique and Zimbabwe—to address climate vulnerabilities amplifies their vulnerability to more severe and frequent adverse climatic events.
“The Reserve Bank of Malawi [RBM]’s attempts to support price stability and increase reserves were not successful, reflecting the supply driven nature of inflation.”
National Planning Commission director general Thomas Chataghalala Munthali said lack of capacity coupled with exogenous shocks is slowing the implementation of Malawi 2063, the country’s long-term development plan, a situation which requires quick State intervention.
“We need to have the wealth with which to execute the Malawi 2063 and that will require that the State takes an active role in the market,” he said.
However, at two percent, the growth projection is way above that of the International Monetary Fund (1.7 percent), World Bank (1.4 percent) and Economist Intelligence Unit (0.7 percent).
