BLANTYRE (Reuters) – Malawi cut its growth forecasts for this year and next in a mid-term budget review on Wednesday, as southern Africa suffers its worst regional drought in decades.
Finance Minister Simplex Chithyola Banda forecast real gross domestic product (GDP) growth of 1.8% in 2024, down from 2.3% projected at the start of this fiscal year.
Banda said GDP is now expected to increase 4.0% in 2025, down from 4.3% seen previously, a copy of his speech showed.
Agriculture is the mainstay of donor-dependent Malawi’s economy and the El Niño-induced drought has wiped out crops across the region, causing food shortages and denting growth.
On Malawi’s debt-restructuring, Banda said the government had agreed terms with major bilateral creditors including China.
Discussions with other creditors like India, the Kuwait Fund and the Saudi Fund for Development were being fast-tracked to try to reach a deal in line with the parameters of Malawi’s International Monetary Fund programme, he added.
The programme, for about $175 million, was approved last year, as Malawi battled crippling shortages of fuel, medicines and fertilisers linked to foreign-currency shortages.
Dollar scarcity has persisted, keeping fuel in short supply and annual inflation consistently above 30%.
(Reporting by Frank Phiri; Writing by Tannur Anders; Editing by Alexander Winning and Alexander Smith)