Economic shocks to spill over to 2023, says MCCCI
Malawi Confederation of Chambers of Commerce and Industry (MCCCI) says the impact of the shocks businesses faced in 2022 will spill over to this year and will pose real challenges.
In his presentation at the first 2023/24 Pre-Budget Consultation Meeting in Blantyre yesterday, MCCCI chief executive officer Chancellor Kaferapanjira said the shocks included shortages of foreign exchange and fuel, inadequate electricity supply and high levels of inflation which dampened business activity.
He said a gross domestic product (GDP) growth rate projection of 2.7 percent this year does not inspire hope for businesses.
Said Kaferapanjira: “Upward inflationary pressures arising from both food and non-food sources, which remained elevated throughout 2022 with headline inflation moving from 12.1 percent in January 2022 to 25.8 percent by November 2022.
“These pressures have become persistent, including the scarcity of foreign exchange as a result of low supply of foreign currency relative to its demand and dwindling official foreign reserves.”
He also said electricity supply disruptions and pro-longed power blackouts are suffocating business operations.
“Three months should not have passed to restore the power challenges that we are facing,” said Kaferapanjira.
In his speech, Minister of Finance and Economic Affairs Sosten Gwengwe said the economy will recover in 2023 as the projected growth of 2.7 percent is above the 1.7 percent registered in 2022.
He said: “The economy is experiencing various external and domestic shocks.
“It is still recovering from the effects of Covid-19, climate-related shocks and economic effects of the Russian-Ukraine War.”
In the 2022/23 financial year, Parliament approved a budget of K2.839 trillion which was projected to be financed by domestic resources estimated at K1.6 trillion, grants amounting to K320.3 bilions and borrowing of K884 billion.
