Country outlook

Despite recent cabinet changes in Malawi, the political scene is expected to remain relatively stable throughout 2001, the London based Economist Intelligence Unit (EIU) said in its latest update on Tuesday. “Whether the government chooses to pursue corruption charges against ex-ministers however, is unclear, as it might implicate those remaining in the cabinet and even the president. But the problems could help split the ruling United Democratic Front,” the EIU noted. The EIU said that the government was expected remain committed to attempts to diversify the economy, although tobacco would still determine economic growth. Real gross domestic product (GDP), the EIU said, was forecast to reach 3.8 percent in 2001 and 4.2 percent in 2002. The country’s qualification for the Heavily Indebted Poor Country (HPIC) debt initiative in December last year could result in debt service expenditure dropping by an estimated US $50 million a year over the next 20 years. Malawi’s debt-service ratio is expected to fall from 21.1 percent in 2001 to 9.5 percent in 2002.