The Malawi Economic Monitor (MEM), a biannual publication by the world bank has predicted that the urban areas can be hit hard by poverty levels if the economy continues to dwindle.
The latest publication titled : From crisis response to a strong recovery indicates that almost 880,000 Malawians could go beyond poverty line due to the covid 19 pandemic.
"The forecasted increase in urban poverty could range from 1.6 percentage points representing around 280,000 Malawians in the baseline growth forecast, up to 4.9 percentage points around 880.000 people in the downside scenario". Reads part of the document.
The publication further acknowledges that given the strong harvest and the agriculture based rural economy, in the baseline scenario rural poverty may see limited impact however, in the downside case, vulnerability to falling below the poverty line could increase by 2.2 percentage points in rural areas.
According to the bank, GDP growth is expected to slow sharply to a baseline of 2.0 percent in 2020.
It reads, : " Risks are heavily tilted to the downside and in a downside scenario with extensive domestic spread of the disease, stricter restrictions on economic activity and a protracted global health crisis, the economy could contract by 3.5 percent in 2020".
Speaking during the launch, World bank country manager for Malawi Hugh Riddell said slower growth could increase poverty, especially in the informal service sectors in urban areas.
The projection is based on a perception that the pandemic will be contained by September 2020.
