BLANTYRE--Malawi's economy, battered by withdrawal of aid by donors and serious shortages of foreign exchange, will nosedive to 1.6 percent, from 4.3 percent this year.

Reserve Bank of Malawi governor Charles Chuka said this will be due to "contraction in some major sectors."

He told business journalists in Lilongwe that "on the basis of the estimates we knew in the first quarter of the calendar year, we had estimated and thought that GDP would grow at 4.3 percent.

"We now know after the second round of crop estimates in particular, that we are now looking at 1.6 percent growth this year," he said.

He said due to a drop in foreign receipts of tobacco, from $430 million in 2010 to $177 million in 2012, and a drop in maize and cotton production, there was a "supply shock" which was coming at the wrong time.

Since she took power in April this year, Pres Joyce Banda has worked overtime to restore back donor confidence and diplomatic relations with its former colonial power Britain, broken down during the administrtaion of the late president, Bingu wa Mutharika.
---
© The Maravi Post 2012. Reproduction without acknowledgement prohibited

Add attachment