Hopeful Growth Targets Require Fiscal Discipline-Standard Bank
The 2024/25 fiscal plan targets to achieve GDP growth by between 3.2 percent and 4.8 percent, which look ambitious but within reach if all controls are exercised.
BLANTYRE, Malawi - The 2024/25 budget paints hope for economic recovery, but more work is needed to keep debt and spending levels down, Standard Bank has said, writes Frank Phiri.
"Success of this budget, and Malawi's recovery, depends on the government's fiscal discipline and adherence to austerity measures," Standard Bank CEO Phillip Madinga said in a statement.
Madinga cautioned that the public debt interest line must be closely monitored as it has increased by 3% of total expenditures.
However, he said the overall public debt level of MWK1.4 trillion represents a reduction by 14% as a proportion of revenue.
"With the positive outlook on the macros, public debt growth is expected to be contained," Madinga said.
"This will be a significant step towards achieving debt sustainability."
Madinga said the budget's proposed export strategies through mega farms, labor export, mining, tourism and diaspora remittances could boost foreign currency supply.
But he pointed out production sectors need focus to achieve the ambitious GDP growth target of 3.2%-4.8%.
"Based on the enhancement of revenue collection processes, anticipated donor inflow opportunities, rationalization of expenditures and additional focus on production sector, the 2024/25 budget gives hope to a better Malawi on the road to achieving the 2063 Vision," Madinga said.
The 2024/25 fiscal plan targets to achieve GDP growth by between 3.2 percent and 4.8 percent, which look ambitious but within reach if all controls are exercised.