Growth of Mozambican economy expected to be over 4.0% in 2019

23 November 2018

Mozambique’s economy is expected to grow in the range of 4.0% to 4.7% in 2019, with the forecast inflation rate to be around 6.0%, according to a statement from the International Monetary Fund’s (IMF) technical mission.

An IMF team led by Ricardo Velloso visited Maputo between 6 and 19 November 2018 to analyse recent economic developments and start talks on possible options for engagement with the Mozambican authorities in 2019.

The statement released in Washington said that the expected growth rate is the result of efforts to create lasting peace, gradual relaxation of monetary conditions, settlement of domestic arrears to suppliers and increased foreign direct investment (FDI) particularly in large liquefied natural gas projects.

The IMF’s technical team recalled that the country’s Gross Domestic Product (GDP) grew at a real rate of 3.3% in the first three quarters of 2018, bolstered by contributions from a wide range of economic sectors, including agriculture.

“Restrictive monetary conditions and a smaller increase in the price of food made inflation decline rapidly, reaching 4.7% year on year in October 2018, despite substantial adjustments in administered prices, the exchange rate remained stable and the Bank of Mozambique rebuilt its international reserves to a comfortable level of 6.3 months of imports,” the IMF said.

The statement added that the Mozambican authorities intend, with the technical support of the IMF, to carry out “an exhaustive diagnosis of the challenges of governance and corruption,” and the technical mission “welcomed” the efforts of the Attorney General’s Office in cooperation with development partners, to bring accountability to the issue of previously hidden debts. (macauhub)