Mozambique budget for 2006 dependant on outside support

15 December 2005

Maputo, Mozambique, 15 Dec – Mozambique will be dependent in 2006 on outside help to cover its budget deficit, according to the Budget Proposal put forward to the Mozambique parliament Wednesday in Maputo.

The proposal includes expenses of 52,529.5 billion metical (around US$2.16 billion). Considering that the government does not expect revenue of more than 27,016.7 billion metical, the excess of 25,512.8 billion must be financed by foreign donations or loans.

Finance Minister Manuel Chang said that the deficit would be financed by foreign donations of a total 16,406.4 billion metical and by foreign loans totaling 9,101.3 billion metical.

Chang told the parliament that projected revenues represented growth of 10.2 percent in relation to 2005.

The budget proposal does not include the debt pardon announced this year by the G8 group of industrialized countries.

According to the G8 announcement debt owed by Mozambique to the World Bank, the International Monetary Fund (IMF) and the African Development Bank, will be dropped.

In the same parliamentary session, Minister for Planning and Development, Aiuba Cuereneia, said that government forecasts for 2006 were based on gross domestic product (GDP) growth of 8 percent and inflation of no more than 7.7 percent.

Th minister added that growth for this year was still expected to reach 7.7 percent despite the inflation rate being slightly higher than forecast, mainly due to increased fuel prices. (macauhub)