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In its latest country overview update released last week, The World Bank has almost halved the GDP growth rate projection of Malawi. It has revised downwards its January 2023 projection of 3 percent GDP growth rate for Malawi to 1.6 percent. The latest estimate indicates that the economic recovery will be slow with serious risks still remaining.
In its latest country overview update released last week, The World Bank has almost halved the GDP growth rate projection of Malawi. It has revised downwards its January 2023 projection of 3 percent GDP growth rate for Malawi to 1.6 percent. The latest estimate indicates that the economic recovery will be slow with serious risks still remaining. The latest projection of the World Bank is also far below the Malawi Government’s 2.7 percent growth rate. The projection is also below the recommended desirable growth rate by experts to achieve sustainable economic growth and poverty reduction of six percent.
The World Bank observed that Malawi’s continued dependence on subsistence, and rain-fed agriculture, curtailed its growth potential and increased its susceptibility to weather shocks leading to food insecurity. According to the Bank, Climate shocks, low agricultural productivity, and slow structural transformation contributed to high levels of poverty in Malawi.
Meanwhile, Tropical Cyclone Freddy, which hit the country’s Southern Region a fortnight ago, has led to the loss of life and property and disruption of business. The cyclone ravaged agriculture when the sector was poised to improve with favourable weather conditions expected in the growing season. The crop and animal production sub-sectors were expected to grow by 3.5 percent against one percent last growing season.
Last week, Reserve Bank of Malawi Governor Wilson Banda admitted that Tropical Cyclone Freddy has worsened the economic prospects of the country.
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Malawi’s economy has been facing a series of challenges such as declining agricultural output, weak electricity supply, foreign exchange scarcity affecting the importation of raw materials, and high global commodity prices.
