LILONGWE (Reuters) - Malawi’s economy could shrink 3.8% this year in a worst-case scenario, Finance Minister Joseph Mwanamvekha said on Friday when announcing his budget in parliament.
The southern African nation, which recorded growth of around 5% in 2019, has produced two different projections for how the impact of the coronavirus will abate.
In the first scenario, based on business conditions normalising by September, economic growth for the year could fall to 1.9%, Mwanamvekha said.
In the second, bleaker scenario, the impact of the pandemic was projected out to December, he said.
Malawi’s economy is facing a double whammy from the global pandemic and from internal political strife, the finance minister said.
“These two unexpected occurrences have caused severe disruptions to the country’s economic spine,” he said.
He said monthly revenue collection had fallen from 90.8 billion Malawi kwacha ($125 million) before the virus hit to around 59 billion each month since then. This has led the government to cut its GDP growth forecast for 2021 to 4.5% from 5.5%.
The country of 18 million people has recorded 481 coronavirus infections but only four deaths so far.
Malawi is due to go the polls for an election on June 23 after the Constitutional Court in February struck down President Peter Mutharika’s narrow victory last year citing gross irregularities.
Reporting by Frank Phiri in Lilongwe; Writing by Promit Mukherjee in Johannesburg; Editing by Jon Boyle and Hugh Lawson