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Malawi economy close to recession- central bank Governor

Discussion in 'International Forum' started by R.B, Oct 18, 2012.

  1. R.B

    R.B JF-Expert Member

    Oct 18, 2012
    Joined: May 10, 2012
    Messages: 5,489
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    BLANTYRE-Reserve Bank of Malawi (RBM) Governor Charles Chuka has
    disclosed that the Malawi economy is expected to shrink further this year,
    with growth now expected at a decimal 1.6 percent — a sharp decline from
    the initial estimate of 4.3 percent. The governor has since warned that the
    outlook is still hazy and that projection could be revised after a further review of the
    economic prospects by the bank's team, a development that could see the
    economy getting into negative growth or recession for the first time since 2005.
    Chuka was speaking on Wednesday in Lilongwe during a dinner organised by RBM
    to enable the governor interact with Lilongwe-based business journalists. His
    revelation follows Finance Minister Ken Lipenga's indication this week that
    government was revising downwards the economic growth rate projection following
    poor performance of the country's agricultural and industrial sectors. Chuka told the
    journalists that the development is shocking and comes at a very wrong time when
    there are ongoing efforts to recover the economy. "We had figures of estimates that
    government did in the first quarter but since then, there has been another
    assessment of the situation," said Chuka. "This is not good news because it means
    that the country, apart from the many problems experienced, now has real supply
    shocks," he said He said the economic situation will affect the fiscal performance of
    government since there will be lower revenue levels than expected. Just like
    Lipenga, he attributed the declining economic situation in the country to poor
    agricultural output especially in cotton and tobacco production. It was anticipated
    that in the 2011/2012 growing season that tobacco production would reach 165
    million kilogrammes while while cotton was projected to reach 200, 000
    kilogrammes. However, actual figures at the end of the season showed that Malawi
    produced only 90 million kilogrammes of tobacco and 90,000 kilogrammes of cotton.
    The country has also registered contractions in the sectors of forestry, fishing and
    manufacturing. However, Chuka was optimistic that in 2013, Malawi will make a
    turnaround in its economic performance as a number of sectors are expected to
    improve, with tobacco production expected to double from this year's figure. Lipenga
    has put the 2013 economic growth projection at 5.5 percent.