IMF downgrades marginal forecast for growth of Mozambican economy

11 July 2013

Mozambique’s economy should grow by 7 percent this year, following the 7.4 percent growth posted in 2012, indicate the most recent forecasts from the International Monetary Fund (IMF).

“The Mozambican economy registered strong growth in 2012, but floods in early 2013 have diminished prospects slightly,” the IMF states. It notes that “preliminary data suggest that real GDP growth rose by 7.4 percent in 2012,” though this is expected to slow to 7 percent this year, despite flood-related destruction, namely of farmland and infrastructures in the south of the country.

The IMF adds that the inflation rate should also be 7 percent, “in line with the authorities’ medium-term objective”.

The IMF report nevertheless mentions internal and external growth risks, while considering that from the budget standpoint Mozambique is on the right path.

External risks are basically due to climate variations, price shocks involving raw materials such as coal, gas or oil, and varying international financial assistance.

Internal risks include possible delays in infrastructure improvements, specifically for rail transport and ports, electric power supply constraints and effects of municipal elections this November and presidential elections next year. (macauhub)