First Capital casts blurred picture of Malawi’s economic outlook for 2022

By Saidi Winnes

First Capital Bank has painted a gloomy picture of Malawi’s macro-economic outlook for 2022 owing to the prevalence of the Covid-19 pandemic and the global political developments.

In its published summary of audited consolidated and separate financial statements, the Bank also cites shortage of foreign exchange, weather-related disasters and the foreign exchange rate and inflation as other factors that will continue weighing on Malawi’s economic prospects.

The Bank says: “The shortage of foreign exchange was predicted to get worse during 2022 even before the increase in the price of essential commodities because of the global political developments.”

“The latter factors coupled with recent weather related disasters will put further pressure on government expenditure the foreign exchange rate and inflation.”

It says timely conclusion and reinstatement of Malawi on a full International Monetary Fund (IMF) programme is of essence for economic recovery not only by providing the much needed foreign exchange but also unlocking support from other development partners.

The Bank has further indicated that the fiscal deficit in the ended year widened due to the policy stance adopted in trying to balance the country’s development, economic stability and provision of social services, which consumed the already limited foreign currency. The net profit for First Capital Bank in the year ended 31 December, 2021 increased from K8 billion to K14.8 billion, representing an increase of 84%.  

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