LILONGWE (Malawi NewsNow)—Finance, Economic Planning and Development minister Goodall Gondwe has on Friday presented a mid-year budget review statement in parliament, while exuding confidence that the Malawi economy recovery is on track despite numerous challenges facing the country.
Presenting the statement to the House, Gondwe said during the six months period the economy has performed extremely well, giving signs of robust economy in the year 2017.
“On general macroeconomic developments, I wish to share the view of knowledgeable people who believe that during the first half of the year, we begun to see signs of an economic rebound from which an economic recovery could emerge.
“There is evidence that, six months into the implementation of the Budget, the performance of the economy commenced a rebound towards recovery that is reflective of the effectiveness of the fiscal and monetary policies being pursued by the Government,” reads the statement.
The statement also indicates that inflation rate has dropped significantly and in January the inflation dropped to 18.2 percent, the lowest since May 2012.
“In particular, during this period, there has been a marked decline in inflation which resulted in a 3 percentage point reduction in the Reserve Bank Policy Rate, while the exchange rate has remained relatively stable. The rate of inflation plummeted to 18.2 percent in January – the lowest since May, 2012. Food inflation went down by 3 percentage points to 21 percent and non food inflation eased to 15 percent from 15.4 percent. This is a significant macroeconomic improvement.
“Another significant indicator of a possible economic turnaround is that capacity utilisation has increased from 57.8 percent to 68.5 percent during the period, suggesting an increase in private sector confidence. Moreover, there has been a robust domestic revenue performance during this period,” reads the statement signed by finance minister Goodal Gondwe which is yet to be debated in the parliament.
The mid-year budget review meeting has also seen the 2016/2017 budget revised downwards from K1,149.2 billion to K1,129 billion, representing a reduction of 1.7 percent.