Economic growth for Malawi: Outlook for November and Beyond

The real GDP growth is expected to remain subdued during 2012 at 4.3% according to the IMF and 4.0% according to EIU. Government of Malawi has reduced its real GDP growth forecast for Malawi to 1.4% on account of significant contractions recorded in major sectors (Agriculture and manufacturing)of the economy. In 2013-2016, growth is expected to recover gradually as the economy stabilizes. In 2015-16 growth is expected to rise but not to levels achieved during late Mutharika’s first term as president unless major new foreign direct investment deals are secured. Downside risk to the outlook is high owing to the possibility of severe drought, a worsening of the euro zone crisis or a sharp slump in prices of Malawi’s main export commodity—Tobacco (Source: EIU Quarterly Investment Report). POSSIBLE IMPACT: Businesses to continue to struggle with a high operating cost environment and more volatile economic conditions. Structural problems like insufficient power supply is likely to remain a major challenge to economic activity.-N I C O A S S E T M A N A G E R S E C O N O M I C R E P O R T O C T O B E R 2 0 1 2