[Malawi] economy to grow faster at 7 pct in '06 - finmin

from Reuters South Africa

Malawi's economy is set to expand by 7 percent in 2006, quickening from 2.1 percent last year, on expected donor inflows and a pickup in agricultural output, Finance Minister Goodall Gondwe said on Tuesday.

That would be the fastest pace of growth in the southern African country since 1995, and outpaces the 6 percent level seen as necessary to alleviate poverty in one of the world's poorest nations.

Gondwe told Reuters in an interview that agricultural production -- which accounts for 40 percent of Malawi's economy -- was expected to rebound in 2006 after good rains and an official fertiliser subsidy introduced last year.

He was also optimistic that Malawi would qualify for a complete write off of its $3 billion outstanding debt after meeting goals set by the International Monetary Fund, which concluded a review of the country's performance last week.

"The prospects are very good for us to achieve a 7 percent growth rate this calendar year because of the bumper harvest possibility and impressive performance under the IMF programme," Gondwe told Reuters.

Malawi's economy grew by 4.6 percent in 2004, but slowed sharply last year after a drought hit agricultural output.

The IMF has set a growth target of 8.2 percent for the year, but this has been described as ambitious by analysts.

Its assessment team said in a statement last week that Malawi had met all the goals set to the end of 2005 under a three-year $55 million Poverty Reduction Growth Facility (PRGF) program, which the body approved last August.

"We have reached completion point. Our performance under the PGRF programme has been impressive, I can't be sure but I am optimistic that we will get debt relief when the (IMF) Board meets in June to decide," Gondwe said.

"This confidence with donors will increase prospects of growth," he said.