Mozambique’s economic growth is likely to slow to 5.8 percent this year, a forecast that is subject to risks if the investments remain moderate and an increase in public debt leads to severe adjustments, according to a World Bank report.
The downward review is based on “persistently low” commodity prices, a weak global outlook and drought in Mozambique, which will raise prices, especially of agricultural products, according to the Mozambique Economic Update report.
The World Bank says that the interventions of the Mozambican central bank to reduce the depreciation of the currency and contain inflationary pressures have significantly reduced foreign reserves and that in March they covered just over two months of imports.
“Given the current climate, it is important that Mozambique continues to move forward with reforms to ensure macroeconomic stability and simultaneously keep the focus on the long term to build a flexible and diversified economy,” said Mark R. Lundell, the World Bank Director for Mozambique, Madagascar, Mauritius, Seychelles and Comoros. (macauhub/MZ)