LILONGWE (Reuters) – Malawi’s 2022 GDP is estimated to grow by 4.1%, from 3% in 2021, as a result of measures to encourage economic recovery and fight corruption, President Lazarus Chakwera said in a state of the nation address to Parliament on Thursday.
Chakwera, who last month fired three cabinet ministers over corruption allegations, however, remained cautious on economic growth, citing the effects of COVID-19 on Malawi’s major export crops, depreciation of the kwacha and rising inflation.
“The availability of foreign exchange to facilitate imports declined in 2021 owing to reduced inflows from export proceeds from tobacco, tea and sugar.
The decline was principally caused by impact of Covid-19 on Malawi’s export destinations,” he said.
Chakwera said Malawi’s budget deficit is estimated to decline to 7.3% from 8.8% as part of his administration’s intention to reduce interest rates.
“Though the decline is moderate, it does signal my administration’s intention to reduce the rate of borrowing and effect stringent measures to control public spending,” he added.
The Monetary Policy Committee of the Reserve Bank of Malawi was meeting on Thursday to decide on the policy rate, currently at 12%, the bank’s spokesperson Ralph Tseka told Reuters.
(Reporting by Frank Phiri; Editing by Nqobile Dludla and Alexander Smith)
