Country Report Malawi January 2009

Outlook for 2009-10

• The May 2009 elections will be hotly contested by the country's three main political parties and their presidential candidates, with none expected to secure an outright majority.
• The opposition Malawi Congress Party (MCP) will have an advantage if it can secure an ally in the Northern region, dominate its Central region stronghold and benefit from the Southern region being split between its opponents.
• A new IMF programme is expected to be agreed that will continue to prioritise macroeconomic stability and structural economic reform.
• Donor support is expected to pick up over the forecast period following the passing of the 2009/10 (July-June) budget, although any debacles with future budgets will lead to disbursements being delayed again.
• The global economic downturn and weak commodity prices will hit the country's trade and investment inflows, but expansion in uranium production will lift real GDP growth to 8.3% in 2009, slowing down to 3.5% in 2010.
• Lower global oil and food prices will see average inflation fall to 8.4% in 2009, outweighing the impact of election-related spending. In 2010 further falls in food prices and lower government spending will reduce inflation to 7%.
• The current-account deficit is forecast to narrow from 14% of GDP in 2008 to 12% of GDP in 2009 and 11.7% of GDP in 2010, assisted by the onset of uranium production and the slowing of import growth.

Monthly review

• The ruling Democratic Progressive Party's primary election process remained acrimonious during December as defeated candidates continued to leave the party amid accusations of intimidation, violence and voting malpractice.
• Zimbabwe's cholera outbreak has now to Malawi, as well as to other neighbouring countries in Southern Africa.
• The IMF has approved an exogenous shocks facility (ESF) arrangement for Malawi worth US$77.1m. The ESF is to be used to help the country to adjust to the sharp increases in food and fuel prices that took place during 2008.
• By using the ESF the Fund hopes that Malawi can adjust to the terms-of-trade shock, rebuild its foreign reserves buffer and maintain momentum in its efforts to improve economic growth and reduce poverty.
• The Electricity Supply Corporation of Malawi (Escom) announced that it had begun preparations for the building of a new hydroelectric power station in the north of the country, on the Rukuru River.

Source: Country Report

This report covers the following industry codes:
SIC Code: 60;49
NAICS Code: 52;22

This report covers the following industry codes:
SIC Code: 60;49
NAICS Code: 52;22