The short-term outlook for the Mozambican economy is a gradual recovery in economic activity and controlled inflation, with real GDP growth of 3.5% to 4% expected in 2018, and 4.0 % to 4.5% in 2019, according to the International Monetary Fund (IMF).
The stronger-than-expected recovery in the agricultural sector, as well as mining production, allowed Mozambique’s Gross Domestic Product to grow by 3.75% in 2017, an increase of 75 basis points over the previous forecast.
An IMF staff team led by Ricardo Velloso visited Mozambique from 25 July to 3 August 2018 to assess recent macroeconomic developments, update the macroeconomic framework for 2018/19 and provide input for the preliminary budget for 2019.
At the end of the visit, the mission issued a statement saying it expects this recovery to be supported by further reductions in interest rates based on the favourable inflation scenario, that inflation will remain low at 6.5% in 2018, that it will fall to 5.5% in 2019 and that international reserves will remain at comfortable levels in 2018 and 2019.
With regard to the State Budget for 2019, the IMF mission recommended the submission of a budget proposal based on realistic macroeconomic assumptions as well as prudent revenue and expenditure forecasts. (macauhub)