Mozambique: Economy grew 6.7 pct in first six months

13 August 2008

Maputo, Mozambique, 13 Aug – Mozambique’s economy expanded by 6.7 percent in the first half of the year, despite problems caused by increasing food and energy prices, a government spokesman said in Maputo.

Luis Covane said the cabinet had appraised the Social and Economic Plan and concluded that average inflation was 10.4 percent.

Rising global fuel costs have impacted on all price sectors in Mozambique. Rice increased in price from US$ 115.5 a ton to over US$ 331 in June, the government spokesman said.

Imported wheat (Mozambique imports 400,000 tons yearly) reached a price of US$ 228 per tone.

Other constraints on Mozambique’s economy this year were the return of tens of thousands of emigrant workers from South African anti-foreigner violence, as well as floods and typhoons.

Consequently, the Mozambican authorities have taken various measures to alleviate the effects of rising costs, such as paying pf subsidies to private transport operators in the capital, importing 15 buses for use in Maputo, as well as VAT exemption for the manufacturing sector.

Declining to put a figure on this extra state expenditure, Covane said it was apparent that Mozambique’s economy could have grown by more than the 7 percent originally forecast. (macauhub)