Malawi on Friday lowered its economic growth prospects for 2020 to 1.9 percent, citing the coronavirus pandemic which has impacted on business activity and spiked social protection spending.
Mutharika said business has slowed down, revenue collection has declined and social protection has increased since the coronavirus pandemic emerged on Africa’s shores in March, triggering a worldwide slowdown in economic activities.
He said the pandemic has severely affected many growth sectors of the Malawian economy, in the process dragging downwards the Gross Domestic Product (GDP) growth target from the initially projected 5.5 percent for 2020.
“As a result, the economy is now projected to register an estimated GDP growth of only 1.9 percent in 2020,” Mutharika said.
He added: “We have also revised downwards the real GDP growth projection for 2021 from an anticipated growth of 5.8 percent to 4.5 percent.”
To cushion the effect of the pandemic on livelihoods, the Malawian government has introduced tax reliefs for consumers and businesses, reduced fuel prices, increased health care spending and emergency cash transfers to vulnerable people.
The cash transfer intervention is targeting the peri-urban areas, with each household receiving MK35,000 (about US$47) per month.
The intervention is expected to run for six months, starting from June 2020.
Mutharika revealed that the economy grew by 5.1 percent in 2019, an improvement from the 3.9 percent real GDP growth registered the previous year.
JN/APA