Malawi growth expected to exceed 7 pct in 2008

Malawi's economy should grow by more than 7 percent in 2008, while inflation is expected to be between 5 percent and 7 percent in the medium term, Finance Minister Goodall Gondwe said on Wednesday.

In an interview with Reuters, Gondwe said that good harvests and growth outside the agricultural sector in the southern African nation would probably bolster economic growth this year, though it would be slightly below growth in 2007.

"A bumper harvest in 2006 supported a rebound in (GDP) growth to 7.4 percent, a larger harvest in 2007 will hold growth at 7.4 percent, and this year growth should remain above 7 percent because growth has spread beyond agriculture," Gondwe said.

Malawi, one of the poorest nations in Africa, is enjoying a modest economic boom that has been sparked by good maize harvests, economic reforms and an increase in aid from Western nations and other international donors.

The country's inflation rate dropped into single digits in early 2007 for the first time in four years, fuelled by lower food prices. That prompted the central bank to continue cutting interest rates.

Inflation is hovering just above 7 percent.

"We expect similar conditions this year, including restrained monetary growth to hold inflation in the neighbourhood of 5 percent to 7 percent in the medium term," Gondwe said.