Mozambique: Central bank confident of 7 pct growth in 2008

11 September 2008

Maputo, Mozambique, 11 Sept – The Mozambican economy is this year expected to reach its growth target of 7 percent despite a rise in fuel and food prices, said a spokesman and director of the Bank of Mozambique Wednesday in Maputo.

At a presentation on the national economic climate in the first half of 2008, Valdemar de Sousa said that gross domestic product (GDP) growth had been 6.7 percent in the period.

In the same period of 2007, GDP growth was below a forecast 7 percent, Sousa noted, which meant it was, “possible to end the year without moving away from the planned level of economic growth.”

Previously, the Bank of Mozambique had indicated growth of 3.5 percent in the first quarter of this year, against 10 percent in the year-ago period, as a reflection of an adverse international economic climate (the economy had not grown by less than 7 percent since before the year 2000).

The bank points to the “bad period in the world economy” and, especially, to the cost of importing fuel, which rose from 2.634 billion meticais in the first six months of 2007 to 5.124 billion meticais in the same period of this year, affecting the State Budget by the equivalent of 0.7 percent of GDP until December.

Most observers have pointed to an increased slowdown of the economy in 2008, after record growth in 2006 (8.5 percent), and 7 percent last year.

Mozambique’s services industry (mainly retail, transport and communications) is the main driver of the country’s economy, accounting for over half of its GDP, which totals around 220.15 billion meticais.

According to the figures presented by the central bank, Mozambican posted accumulated inflation of less than 4.8 percent from January to August of the current year.

The Mozambican authorities’ target is to end the year with na inflation rate of less than 10 percent, which will depend on price fluctuations, especially during the Christmas period. (macauhub)