Mozambique’s economy is expected to grow by just 4.8 percent this year due to the slowdown in public spending and investment and the impact of adverse weather on agricultural production, wrote the Economist Intelligence Unit (EIU).
The EIU, after stating that the growth rate in 2016 will be the lowest in 15 years, has also lowered the growth forecast of the Mozambican economy over the coming years, falling from an average of 6.8 percent per year between 2017 and 2020 to 5.8 percent.
The worsened outlook between 2017 and 2020 is based on expected low prices for raw materials, according to the latest report on Mozambique from the EIU.
“Oversupply and sluggish demand in the global market will deter further capital investment into Mozambique’s coal industry and stall the development of graphite, titanium and gold resources,” said the EIU .
The EIU analysts also said prices would continue to come under upward pressure and the inflation rate is expected to increase to almost 13 percent in 2016, the highest level in five years. (macauhub/MZ)