Mozambique’s economic growth expected to remain weak in 2018/2019

28 March 2018

Mozambique’s gross domestic product (GDP) growth will remain weak in 2018/2019, with an average rate of 3.3% due to weak domestic demand and reduced investment, Economist Intelligence Unit (EIU) analysts have said in the latest report on the country.

“We expect more robust economic growth starting in the two years mentioned, driven by export-focused industries, such as exploration of large natural gas deposits,” said the report.

The EIU predicts that from 2020 until 2022 the Mozambican economy will grow at an average rate of 5.4%, with a maximum of 5.6% in 2022 and a minimum of 5.3% in 2020, with the inflation rate over those years in the 5.1% to 6.0% range.

The report once again said that Mozambique is experiencing a liquidity crisis, triggered by excessive external debt and a freeze on development aid by the partners of the so-called Group of 14.

According to the report, the Mozambican liquidity crisis will continue to have a major impact on the evolution of macroeconomic indicators, in addition to the country being unable to access virtually all external markets to finance itself due to its inability to service its debt.

The EIU analysts pointed out that the relationship with programme support countries remains strained, and that the country is not expected, in the medium term, to see a return to levels of aid seen before the hidden debt crisis. (macauhub)