The Reserve Bank of Malawi (RBM) has cast doubts on this year’s growth projection owing to a number of downside risks, including geopolitical tensions in Russia and Ukraine as well as weather-related shocks.
In 2022, government projected the country’s gross domestic product (GDP) at 4.1 percent, taking into account economic recovery measures it is implementing in the socio-economic recovery plan as well as the normalisation of global supply chains.
RBM headquarters in Lilongwe
But RBM in its second Monetary Policy Committee Statement said the impact of cyclones Ana and Gombe, which hit the southern part of the country, delayed and early cessation of rains, intermittent electricity power supply, spill-over effects of the ongoing Russia-Ukraine war and global supply-chain disruptions could affect growth.
Said the bank: “GDP growth is projected at 4.1 percent in 2022 from an estimated growth of 3.9 percent in 2021on assumption of an expansion of the agriculture sector, supported by favourable weather conditions.
“Further, the normalcy of both local and cross-border activity, following removal of Covid-19 pandemic-related mobility restrictions, is also expected to spur growth in a number of non-agricultural sectors ,but this notwithstanding, a number of downside risks could jeopardise the growth prospects.”
RBM’s sentiments come at a time, the World Bank has slashed Malawi’s growth projection for 2022 by 0.9 percentage points from an earlier forecast of three percent to 2.1 percent.
At 2.1 percent, the projection is also a decline from the bank’s 2021 growth estimate for the country of 2.8 percent.