LILONGWE (Reuters) - Malawi’s economy expanded by an estimated 9.7 percent in 2008, boosted by an expansion of the telecommunication industry, high tobacco sales and a strong maize harvest, the International Monetary Fund said on Wednesday.
The IMF also forecast strong growth for 2009, but did not give figures, due to another good harvest and the start of the uranium production but warned of risks from the global economic downturn.
“Weaker global demand could lead to lower prices of some of Malawi’s export commodities compared to last season,” IMF country manager Maitland MacFarlan told a news conference.
“The mission therefore agrees that developments in export markets and their implications for domestic demand need to be monitored carefully.”
The southern African nation has been enjoying a relative economic boom, and growth averaged 7 percent in the past three years. It managed to bring down inflation from 30 percent to single digits last year.
Finance Minister Goodall Gondwe said that the 2008 growth is three times above the continent’s forecast of 3 percent.
“This growth is extraordinary. It cannot be doubted that we are doing well and with the current projected 250 million kilogrammes of tobacco this year, I hope that we will be somewhere,” said Gondwe.
The IMF said the inflation rate would likely decline in the coming months as recent fuel price reductions take effect.
Inflation has been on an upward trend since May last year and quickened to double digits for the first time in two years in January, then slowed down to 9.7 percent in February.
The IMF team was in Malawi on a two-week mission to conduct the first review of Exogenous Shocks Facility (ESF) — a programme between the government and the Fund — and for the 2009 Article IV consultation discussions on the country’s economic prospects and policies.
ESF is the Fund’s programme that provides quick and large loans to offset the impact of major exogenous shocks such as volatilities in international fuel, fertilizer and food prices.
Under the facility, Malawi recieved US$77.1 million in December.