Industry skeptical on 2019 GDP growth

Post was last updated: January 28, 2019

By Chimwemwe Mangazi:

At a time Capital Hill and the African Development Bank have predicted robust economic growth in 2019, the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has said it is skeptical on GDP growth this year.

In a Fourth Quarter Economic Report released on Friday, MCCCI says growth for 2019 may be subdued by intermittent power supply and weak performance of the industry sector.

Last week, Finance Minister Goodall Gondwe expressed confidence that the local economy could swell by seven percent while African Development Bank forecast the economy to grow by 5.6 percent.

“Our forecast for 2019 continues to be cautious due to anticipation of continuous intermittent power supply compounded by the challenges and weakened performance of the industry sector,” MCCCI says in report.

MCCCI further notes that access to finance remains one of the major obstacles facing the private sector while credit to the public sector had been growing with greater magnitude although the trend has not been stable.

MCCCI further notes that official gross reserves remained stable with import cover hovering above three months since June 2017 and does not expect the situation to change as an increase in imports is not anticipated due to reduced economic activity.

MCCCI, therefore, says it anticipates a higher level of reserves to be maintained in 2019.

On the global scene, the World Bank expects growth to slow to 2.9 percent in 2019 citing moderating international trade and investments, elevated trade tensions and tightening financing conditions.

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