The Reserve Bank of Malawi (RBM) has predicted that financial and insurance will grow by 6.1 percent this year.

The 2018 growth is 0.6 percentage points shy of the 6.7 percent recorded in 2017.

In its Financial and Economic Review for the first quarter of 2018 released on Thursday, RBM says the projection is largely on the basis of increased new developments in information and communications technology such as the introduction and wide-spread usage of electronic funds transfers such as mobile money and internet services.

“However, the performance of the sector is also likely to be affected by the problem of capitalization, an upward risk in Non-Performing Loans and the declining interest rates which are unlikely to be matched by a corresponding increase in lending volumes,” reads the report in part.

The central bank further says it sees the information and communication sector growing by 5.5 percent this year, following another growth of 6.4 percent registered in 2017.

RBM says, as the country develops, information and communication is increasingly becoming a necessity and, therefore, strong growth would continue to be registered.

Additionally, RBM says growth is expected to be driven by the 2019 elections as there will be more advertisements and more communication during the campaign period.

The monetary authorities also say they expect growth in the manufacturing sector to pick up to 3.3 percent in 2018, from 1.8 percent in 2017.

Growth of the sector has over the years been constrained by persistent electricity challenges, weak agricultural production and the persistence of cheap smuggled products which create unfair competition with locally produced products.

“The estimated growth in 2018 is in anticipation of stabilization in power supply due to improvements in water levels in the Shire River. In the medium term, finalization of the Malawi- Mozambique power interconnection project will translate to more growth in the sector,” reads the report.