IMF lowers growth forecast for Mozambique to 6.3 pct this year

30 October 2015

The International Monetary Fund Thursday lowered its forecast for economic growth in Mozambique, to 6.3 percent in 2015 and 6.5 percent in 2016, warning that there are “new challenges that require decisive policy measures.”

In a statement issued following a two-week technical visit to Mozambique, the team led by Michel Lazare said in a statement that “economic activity in 2015 remained solid,” but warned “from the mission’s point of view, growth will reach 6.3 percent in 2015 and is expected to accelerate slightly to 6.5 percent in 2016.”

The downward review cuts 0.7 points from growth previously forecast by the IMF – 7 percent this year and 8.2 percent in 2016 – and represents a setback for growth of 6.5 percent recorded during full global economic recession, in 2009, bringing an end to a five-year cycle in which Mozambique recorded economic growth of over 7 percent.

Between 2017 and 2020 on average “growth could reach 8 percent due to positive prospects for large-scale investments in extractive industries, particularly the liquefied natural gas industry.”

In a statement, the IMF staff noted “inflation remains low, at about 2 percent, but is expected to increase to 5-6 percent over the next few months due to the recent depreciation of the metical, and necessary adjustments in prices.” (macauhub/MO)