Mixed fortunes for Malawi, others

The International Monetary Fund (IMF) says prospects in Low-Income Countries (LICs), including Malawi, are slowly improving, helped by a better global outlook, as economic growth accelerates, inflation decreases, and financial conditions ease.

However, in its Macroeconomic Developments and Prospects in LICs Report, IMF warns that significant uncertainties and adverse risks remain in the context of a more shock-prone world.

Reads the report in part: “Liquidity conditions remain tight and the burden of high debt service payments limits the space for development spending.

However, there is significant heterogeneity amongst LICs. The poorest countries have been hit hardest by the pandemic and have experienced the strongest scarring in terms of output loss.”

IMF says decisive efforts are needed to accelerate income convergence with more advanced economies and make progress towards the sustainable development.

“On the domestic front, prudent fiscal and monetary policies would be key to maintain macroeconomic stability.

“The authorities should also focus on accelerating domestic revenue mobilisation and prioritising public spending to create additional space for critical development and social spending.”

Secretary to the Treasury Betchani Tchereni is on record as having said there are several efforts that would improve the economy, including rationalising revenue collection and focusing on production to boost exports.

Commenting on the budget, he said the deficit was brought down to K1.4 trillion, less than the K1.645 trillion that the International Monetary Fund (IMF) predicted.

“That is a miracle on its own to get to that figure we need to consider revenue rationisation but also look at issues of expenditure,” said Tchereni.

He said foreign debt was being restructure and that government borrowing has been for investments not other recurrent transactions.