Mozambique: GDP growth expected to reach 6.5 pct in 2008

16 December 2008

Maputo, Mozambique, 16 Dec – Mozambique’s Minister for planning and development, Aiuba Cuereneia said Monday in Maputo that the growth of the Gross Domestic Product (GDP) in Mozambique will not reach the expected 7 percent for this year, and could total just 6.5 percent.

Cuereneia noted that, the oil and food crises and, recently, the world financial crisis had weighed in the decision to lower the projection for this economic indicator.

The Mozambican minister also said that the effects of the crisis were expected to continue to be felt in 2009, when projections for GDP growth in Mozambique point to 6.7 percent.

“We had to review things in relation to GDP growth projections. It was expected that in 2008 Mozambique would grow by 7 percent, but we reviewed that to 6.5 percent,” the minister said on presenting the budget proposal for 2009.

Cuereneia also said that due to high oil prices on the international market Mozambique had spent an extra US$350 million, with total expenditure exceeding US$700 million each year, in order to import the same amount of fuel. In order to reduce the effects of the crisis, internally, the State had to give up tax revenues of some US$115 million in less than a year.

“The government maintains its overall production projections at 8.4 percent, despite it already being clear that some business sectors, such as agriculture, will not achieve the target for 2008. We believe that the deficit will be compensated by other sectors that have generally performed better in the second half, such as construction and services to the Government,” he said.(macauhub)