Mozambican economy expected to grow by no more than 4.5 pct in 2016

27 June 2016

Mozambique’s economy is this year expected to grow by no more than 4.5 percent, according to the latest assessment of the International Monetary Fund (IMF), published at the end of a week-long visit by a technical mission.

Figures from the National Statistics Institute point to the Mozambican economy positing growth of 5.3 percent in the first quarter. The Institute also expects economic growth to total 5.8 percent by the end of the year, following growth of 6.6 percent in 2015.

The statement prepared by the team headed up by Michael Lazare that visited Maputo from 16 to 24 June, said that the Mozambican economy was facing complex challenges. This situation would lead to growth falling by almost three percentage points compared to maximum figures of previous years.

The IMF team said that prices had been rising very quickly, with year on year inflation totalling 16 percent in May. Alongside this public expenditure has been expanding and public debt has exceeded all targets.

The statement also said that, in the meantime, the national currency (metical) had depreciated by around 28 percent since the beginning of the year and foreign reserves are in decline.

As well as noting that the country’s economic performance under the agreement signed previously had been disappointing, the team added that Mozambique’s public debt had “reached a very worrying level.” (macauhub/MZ)