Analysts and government of Mozambique differ in most economic forecasts for 2015

28 April 2015

Macroeconomic forecasts from the Mozambique government for 2015 differ, except for inflation, from those presented by two of the leading independent economic analysts who regularly follow the developments of the Mozambican economy.

Amongst several advanced macroeconomic forecasts during the month of April from the Economist Intelligence Unit (EIU) and Standard Bank Moçambique (SBM), which both publish a monthly economic report on the country, only the average annual inflation is in line with the target of 5.1 percent set out in the State Budget (OGE), which was approved in general by the Mozambican parliament on Monday.

Considering the 2.3 percent inflation rate recorded in 2014 and given the trend of lower fuel prices in international markets, the EIU projects, moreover, a rate of 3.7 percent, which is justified by internal factors such as a possible increase in energy tariffs and the depreciation of the metical.

Less optimistic than the Mozambican authorities, who estimate a growth in gross domestic product (GDP) of 7.5 percent, the EIU analysts expect GDP growth of 7.2 percent, while Standard Bank presents the worst scenario, setting economic growth at 6.5 percent.

The government is more conservative, however, when it comes to net foreign reserves, which it expects will total US$2.491 billion, while the EIU expects US$2.64 billion and the SBM US$3.623 billion.

For the total value of exports the government of Mozambique also has the lowest target, of around US$4.188 billion, while the EIU expects exports to reach US$4.306 billion, and the Standard Bank s even more optimistic with an estimate of over US$5.9 billion.

In terms of the budget deficit, for which the SBM economists do not have a forecast, the EIU is also more optimistic (8.2 percent of GDP) than the government, which expects a deficit of 11.1 percent of GDP.

In terms of the current account deficit, for which government projections have yet to be made public, there is a variation of 16 percentage points between the forecast of the Standard Bank (47.50 percent of GDP) and the EIU (31.50 percent). (macauhub/MZ)