1 week Ago By Chimwemwe Mangazi
The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has said businesses are still grappling due to significant macroeconomic hurdles which could impact economic growth trajectory. In its third quarter Economic and Business Environment Review published recently, the chamber notes that inflation remains a pressing concern, reaching 33.9 percent in August.
It further indicates that persistent foreign exchange shortages remain a significant challenge with gross official reserves declining to $549.85 million or 2.2 months import cover in August, the lowest in the past 12 months.
This development has led to a widening spread between official and parallel market exchange rates, with the parallel market seeing rates as high as K2,500 to the US dollar. Macroeconomic instability still persists, particularly scarcity of foreign exchange, rising inflation, elevated interest rates and volatile exchange rate. “If prolonged, economic activities including manufacturing might be affected,” the report reads.
In a recent interview, Economics Association of Malawi President Bertha Chikadza said in the short term, emergency food aid is vital for providing immediate relief to households most affected by food shortages in order to contain rising inflation. Commenting on exchange rate performance recently, economist Marvin Banda said deviations in Kwacha’s performance were caused by seasonal variations in market conditions..
