Mozambique budget for 2016 has 10.2 pct GDP deficit

10 December 2015

The draft state budget law for 2016 presented Wednesday by the government of Mozambique in Parliament includes expenses of 246 billion meticais (US$4.77 billion), the Mozambican press reported.

The Minister of Economy and Finance, Adriano Maleiane, who presented the proposal during a plenary session of the Mozambican parliament, said 184 billion meticais, or 74.8 percent of the total will be from domestic resources, with 174.4 billion meticais from state revenues and 7.6 billion from domestic debt.

Sixty-two billion meticais, or 25.2 percent of total expenditure, will be from external resources, 40 percent from donations and 60 percent from loans for the completion of projects.

The macroeconomic scenario of this draft state budget and the proposal for the Economic and Social Plan forecasts a drop in economic growth from 7.8 percent to 7 percent, average annual inflation of 5.6 percent and a 10.2 percent Gross Domestic Product deficit.

The minister explained the review of the outlook for Gross Domestic Product (GDP) with the continuous drop in the price of raw materials on the international market and the depreciation of the national currency, the metical, due to the strengthening of the dollar.

The Mozambican Prime Minister Carlos Agostinho do Rosário, said in turn that the expected value of exports would fall from an initial estimate of US$4.6 billion to US$3.6 billion.

The traditional Mozambican export products, particularly shrimp, tobacco, cashew nuts and sugar, will increase sales abroad by 14 percent, while exports from major projects, particularly in the extractive industry will suffer a decline of 5.4 percent, said Rosário. (macauhub/MZ)