Malawi has big problems with energy
2022.11.25 10:11
Malawi has big problems with energy
Budrigannews.com – Finance minister of Malawi Sosten Gwengwe said on Friday that problems with power generation and rising inflation have put pressure on the economy, so Malawi has cut its growth forecast for 2022 from 4.1% to 1.7%.
The COVID-19 pandemic and extreme weather brought on by a tropical cyclone in 2019 both had a negative impact on Malawi’s economy, but the finance minister stated that Cyclone Ana in late January 2021 had a negative impact on growth once more.
The storm damaged the Kapichira hydropower station, causing the national grid to lose approximately 130 megawatts.
In a mid-year budget speech, Gwengwe stated, “Malawi’s real GDP growth is projected at 1.7% in 2022, a downward revision from 4.1% envisaged at the start of the 2022/23 fiscal year.”
He said that growth is expected to be 2.6% in 2023. He also said that rising inflation had also put pressure on the economy because food costs and the effect of a currency depreciation had caused prices to rise for most goods and services.
Inflation reached 26.7% in October, but it is expected to moderate to 21.5% by the end of the year, reach 21.8% in 2023, and then begin to decrease.
According to Gwengwe, the government wanted to reduce the debt-to-GDP ratio from 8.7% at the end of this fiscal year to 7.1% in order to address persistent budget deficits.
