Malawi 2020 GDP to shrink if Covid persists, finance minister says

LILONGWE - Malawi’s economy could shrink 3.8 percent this year in a worst-case scenario, Finance Minister Joseph Mwanamvekha said when announcing his budget in parliament.

Malawi, which recorded growth of around five percent in 2019, has produced two different projections for how the impact of the coronavirus will abate.

In the first scenario, based on business conditions normalising by September, economic growth for the year could fall to 1.9 percent, Mwanamvekha said.

In the second, bleaker scenario, the impact of the pandemic was projected out to December, he said.

Malawi’s economy is facing a double whammy from the global pandemic and from internal political strife, the finance minister said.

“These two unexpected occurrences have caused severe disruptions to the country’s economic spine,” Mwanamvekha said.

He said monthly revenue collection had fallen from 90.8 billion Malawi kwacha ($125 million) before the virus hit to around 59 billion each month since then. This has led the government to cut its GDP growth forecast for 2021 to 4.5 percent from 5.5 percent

The country of 18 million people has recorded 481 coronavirus infections but only four deaths so far.

Malawi is due to go the polls for an election on June 23 after the Constitutional Court in February struck down President Peter Mutharika’s narrow victory last year citing gross irregularities. – REUTERS.

to less than $20 a barrel at the peak of the crisis, less than a third of the $66 it cost at the start of the year.

For a brief period buyers were actually paid to take delivery of crude oil amid a shortage of storage.

The price has since partly recovered to around $37 a barrel.

BP says it has "a growing expectation that the aftermath of the pandemic will accelerate the pace of transition to a lower carbon economy and energy system, as countries seek to 'build back better' so that their economies will be more resilient in the future." - BBC.