BY Jane Gondwe
Standard Bank has forecast that Malawi’s economic recovery will continue in 2022 with growth forecast to reach 4.1% driven by rebounds in manufacturing, mining and quarrying, construction, transportation and electricity, gas and water supply.
In a statement announcing financial results for the year ended December 31, 2021, the Bank, however, says despite the economic growth prospects, the pressure on the exchange rate will likely continue on the back of weak foreign exchange supply.
“Upward pressures on inflation rate will likely remain in the first half largely driven by supply constraints,” states the Bank.
In the year under review, the group says it continued to operate in a challenging operating environment as the demand for foreign currency continued to outweigh supply.
“This resulted in the depreciation of the Malawi kwacha and the expectation is for the Kwacha to depreciate further as we head 2022. Covid-19 also continued to affect business which in turn impacted credit growth and transactability,” reads the statement
The domestic economy is estimated to have grown by 3.9% in 2021 from 0.9% in 2020 following solid performance in the agriculture, mining, quarrying and construction sectors.
In response to rising oil prices, global supply chain constraints and seasonal fluctuations in domestic food prices, global supply chain headline inflation picked up in the year and averaged 9.3% compared to 8.6% in 2020.
The Kwacha depreciated against the United States dollar by close to 6% in 2021compared to about 3% in 2020 owing to weak foreign exchange supply.
Standard Bank’s profit after tax of MK24.8 billion was 4% above the prior year, and total revenue grew by 31% year on year driven by growth on both net interest income and non-interest revenue