Malawi has reduced its 2025 growth forecast to 3.2% amid protests over rising inflation affecting street vendors and unemployed youths. Finance Minister Simplex Chithyola Banda reported inflation hitting 28.5% and outlined plans to mitigate forex shortages and address public debt amidst civil discontent.
Malawi’s government has revised its economic growth forecast for 2025 downward to 3.2%, reducing it from the previously estimated 4.0%. This adjustment comes as citizens, particularly street vendors, engage in protests against rising prices driven by double-digit inflation, which they attribute to the government’s ineffective management.
Protests have erupted in major cities, including Blantyre and the capital, Lilongwe, primarily involving jobless youth frustrated with President Lazarus Chakwera’s administration. Alongside addressing inflation, Finance Minister Simplex Chithyola Banda aims to tackle foreign exchange shortages exacerbated by soaring inflation, recorded at 28.5% year-on-year in January.
The government intends to stimulate foreign exchange supplies through enhanced agricultural, tourism, and mining production. A national anti-crime unit will also be established to counter the thriving black market for foreign currency. Band’s budget outlined a deficit of 9.6% of GDP for the current fiscal year and an anticipated 9.5% for the next.
In summary, Malawi is witnessing increased social unrest due to soaring inflation and economic challenges. The government is adapting its fiscal policies, reducing growth forecasts while attempting to stabilize the economy through enhanced production sectors and addressing debt restructuring. The situation highlights the pressing need for effective governance amidst challenging economic conditions.
Original Source: www.straitstimes.com
