Malawi Economic Monitor, July 2020 : From Crisis Response to a Strong Recovery
Malawi’s new Government has inherited a difficult situation: the global COVID-19 pandemic has interrupted the country’s trajectory for a third straight year of faster growth, and tackling its impacts will present a considerable challenge. Growth improved to an estimated 4.4 percent in 2019, up from 3.5 percent in 2018, reflecting a rebound in agriculture. Improved agricultural production supported stronger performance in the industrial and service sectors. The uptick in growth also indicated resilience in Malawi’s economy in light of the impact of Cyclone Idai and considerable political uncertainty. The economy was on a trajectory for its third consecutive year of faster growth in 2020 before the onset of the COVID-19 pandemic. The full extent of the epidemic’s negative impact is uncertain as the crisis is still unfolding, but a host of external and internal factors are dampening the Malawi economy. Global factors include both supply and demand channels. Disrupted supply chains have reduced imports of key production inputs, particularly from South Africa and China. However, exports from both countries have partially rebounded after their strict containment measures have been reduced earlier in the pandemic. Preliminary data indicates that imports were 26 percent lower in April and May 2020 compared to the same time last year. Increased trade logistics costs and delays are also affecting the flow of goods through borders. On the demand side, decreased demand from key trade partners is weighing on exports. The tobacco auction season through early July has seen a decrease in sales, with a 11.9 percent reduction in sales values, due to a 14.7 percent reduction in volumes partially offset by a 3.2 percent increase in average price. Tourism has already been severely affected. Remittances (through money transfer) decreased by 57 percent y-o-y in April before rebounding in May, when they were still 15 percent lower than the year prior.
| Main Author: | |
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| Format: | Report biblioteca |
| Language: | English |
| Published: |
World Bank, Lilongwe
2020-07
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| Subjects: | CORONAVIRUS, COVID-19, PANDEMIC RESPONSE, PANDEMIC IMPACT, ECONOMIC RECESSION, FISCAL TRENDS, ECONOMIC GROWTH, ECONOMIC OUTLOOK, DEBT SUSTAINABILITY, CURRENT ACCOUNT DEFICIT, HEALTH POLICY, CONSUMPTION, LIVELIHOODS, CASH TRANSFERS, TRADE, FINANCIAL SECTOR, |
| Online Access: | http://documents.worldbank.org/curated/en/835161595529532367/Malawi-Economic-Monitor-From-Crisis-Response-to-a-Strong-Recovery http://hdl.handle.net/10986/34220 |
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| Summary: | Malawi’s new Government has inherited a
difficult situation: the global COVID-19 pandemic has
interrupted the country’s trajectory for a third straight
year of faster growth, and tackling its impacts will present
a considerable challenge. Growth improved to an estimated
4.4 percent in 2019, up from 3.5 percent in 2018, reflecting
a rebound in agriculture. Improved agricultural production
supported stronger performance in the industrial and service
sectors. The uptick in growth also indicated resilience in
Malawi’s economy in light of the impact of Cyclone Idai and
considerable political uncertainty. The economy was on a
trajectory for its third consecutive year of faster growth
in 2020 before the onset of the COVID-19 pandemic. The full
extent of the epidemic’s negative impact is uncertain as the
crisis is still unfolding, but a host of external and
internal factors are dampening the Malawi economy. Global
factors include both supply and demand channels. Disrupted
supply chains have reduced imports of key production inputs,
particularly from South Africa and China. However, exports
from both countries have partially rebounded after their
strict containment measures have been reduced earlier in the
pandemic. Preliminary data indicates that imports were 26
percent lower in April and May 2020 compared to the same
time last year. Increased trade logistics costs and delays
are also affecting the flow of goods through borders. On the
demand side, decreased demand from key trade partners is
weighing on exports. The tobacco auction season through
early July has seen a decrease in sales, with a 11.9 percent
reduction in sales values, due to a 14.7 percent reduction
in volumes partially offset by a 3.2 percent increase in
average price. Tourism has already been severely affected.
Remittances (through money transfer) decreased by 57 percent
y-o-y in April before rebounding in May, when they were
still 15 percent lower than the year prior. |
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