The United Nations (UN) says under the current scenario, Malawi’s average economic growth rate will remain at 3.3 percent from 2025 to 2030.
The projection is based on economic growth data from the past decade (2013 to 2023) of an average growth rate of 3.3 percent and a standard deviation of plus or minus 1.8 percent.
In its Common Country Analysis, the UN observes that in the worst case-scenario, taking into account the frequent economic and climatic shocks that have hindered the country’s growth in recent years, the economy could grow by an average of 1.5 percent during the period, or 5.1 percent where the best possible outcomes are achieved
The reort says this is a huge setback to the Malawi 2063 (MW 2063) First 10-Year Implementation Plan (MIP-1) aspiration of the economy attaining the middle lower income status by 2030 with an average growth rate of 10 percent.
While conceding that more regular and intense shocks have undermined Malawi’s sustained and inclusive growth, the UN said the impacts of climate change on the economy are projected to increase in both frequency and intensity.
Reads the update in part: “Over the past five years, Malawi has faced numerous disruptions, including the El Niño weather conditions [2024], Tropical Cyclones Freddy [2023], Gombe (2022), Idai [2019], and Tropical Storm Ana [2022], and the Covid-19 pandemic.”
National Planning Commission spokesperson Thom Khanje said in interview on Tuesday that with accelerated efforts and implementation of key interventions for the attainment of middle income status by 20230 as targeted under MIP-1, “we can get back on track and attain the growth rates required for the attainment of MIP-1 targets”.
On the other hand, Minister of Finance and Economic Affairs Simplex Chithyola Banda is quoted as having conceded that the domestic economy is also prone to natural disaster, which affects productivity in various sectors.
Last week, the International Monetary Fund said the macroeconomic outlook is subdued and dependent on the agricultural sector output and foreign grant support, observing that the economy has been buffeted by several shocks.
Reads the IMF statement in part: “Under current policies, the mission expects real gross domestic product [GDP] growth to be 2.4 percent in 2025 and gradually increase to 3.4 percent over the medium term.”
The World Bank earlier warned that climate change can reduce Malawi’s GDP by three to nine percent by 2030, six to 20 percent by 2040 and eight to 16 percent by 2050 if the country stays on its current development trajectory, the World Bank estimated.
Malawi needs to invest $46.33 billion (about K81 trillion) up to 2040 or $2.21 billion (about K3.9 trillion) annually to deal with effects of climate change, according to climate change assessment.
