Malawi's balance of payments improves
Malawi's overall balance of payments position as measured by the change in net international reserves registered some improvement in the first three months of 2012 as it recorded a deficit of K8.9 billion down from a deficit of K11.2 billion recorded in the last three months of 2011.
The Reserve Bank of Malawi (RBM), in its Financial and Economic Review for the first quarter (Q1) of 2012 released on Monday attributed the development to a slowing down of agricultural inputs importation.
"Projections for the merchandise trade indicated a trade deficit of K25.5 billion in the first quarter of 2012 from a deficit of K25.9 billion during the fourth quarter of 2011. Grants from donors stood at K10.8 billion in the quarter from K8.3 billion in the preceding quarter," said RBM.
According to the central bank, gross official reserves recorded a quarterly decrease of US$52.5 million to US$37.9 million in the first quarter of 2012 following another decline of US$72.7 million recorded in the previous quarter.
RBM's foreign liabilities rose by US$0.3 million to US$247.5 million in the first quarter of 2012 having declined by US$4.6 million in the fourth quarter of 2011.
"The Reserve Bank of Malawi's loan repayment to the International Monetary Fund amounted to US$6.3 million during the review quarter compared to US$6.9 million repaid in the previous quarter," reads part of the review.
The central bank says exports are projected at K47.3 billion during the first quarter of 2012, down from an estimate of K75.9 billion for the fourth quarter of 2011.
"The decline was seasonally expected as agriculture exports decline during the quarter. Imports are projected to amount to K72.8 billion in the first quarter of 2012, down from K101.8 billion registered in the preceding quarter.
"The downward projection for imports during the quarter was on account of cyclical expectations. Imports declined in the first quarter of the year because of the decline in importation of agricultural inputs as
well as foreign exchange shortages. The country's trade balance is therefore projected to have declined marginally to K25.5 billion during the first quarter of 2012 from K25.9 billion in the fourth quarter of 2011," says RBM.
The central bank says during the period under review, the capital account received US$83.2 million in the form of project grants earmarked for various projects in the country, up from US$50.5 million received in the previous quarter.
The country, according to RBM, did not receive any balance of payments support in the quarter under review.