Standard & Poor’s downgrades growth forecast in Mozambique to 5.5 pct this year

19 April 2016

Credit rating agency Standard & Poor’s (S&P) Monday reduced Mozambique’s growth forecast from 6.5 percent to 5.5 percent this year due to the postponement of investments in the gas sector and the impact of drought on agricultural production.

“We have reduced our growth forecast to 5.5 percent compared to our previous estimate of 6.5 percent, due to the postponement of investments in the gas sector and because of drought impact on agricultural production,but continue to expect that growth will recover in 2017, to 7 percent, and in 2018 will be 7.5 percent,” said S&P.

In a statement issued in New York on the upward revision of the ‘rating’ for the country, S&P added that accelerated growth in the coming years will be bolstered by “the acceleration of investments in the gas, energy and transmission networks sectors”.

S&P believes “that the Government and external partners will complete negotiations on investment this year and begin construction of trains to transport natural gas in 2017-2018.”

However, the forecast investments in the coming years are not enough for the rating Outlook to be positive because such “mega” projects have risks, said the rating agency. (macauhub/MZ)