The proposed amendment of the state budget law presented by the government of Mozambique focuses only on spending, and contains no increases in taxes or levies, the Minister of Economy and Finance said on Monday in Maputo.

Adriano Maleiane, who was speaking at a hearing organised by the Parliamentary Committee on Constitutional Affairs, Human Rights and Legality, said the proposal “aims to minimise the adverse effects of the current international and domestic economic situation and, in this way, reduce price pressures with a negative impact on people’s lives.”

Maleiane mentioned as reasons for the government to propose a revision of the state budget, the slowdown in economic growth from 7.0% to 4.5%, the increase in the inflation rate to an estimated annual average of 16.7% and the increase of the 10.2% budget deficit to 11.3% of GDP, a percentage that is equivalent to US$77.8 billion.

“It should be noted that the review of debt servicing (principal and interest) does not include the impact of state guarantees on loans taken on by public enterprises Mozambique Asset Management and ProIndicus worth US$1.2 billion as their potential execution by creditors is not foreseen,” the minister said. (macauhub/MZ)