Mozambique’s public debt is expected to reach 102.5% of gross domestic product (GDP) at the end of the year, with the economy likely to grow by 3.5%, Fitch Ratings said in an analysis report on the country’s economy.
For 2019, Fitch Ratings forecasts economic growth of 3.7%.
The agency’s analysts said in the document that “the budget deficit will reach 5.7% of GDP, which rises to 6.9% when the arrears are considered, gradually rising to 7.3% in 2019 and 7.8% by 2020, reflecting the still low growth and pressure on spending due to the electoral cycle of this and next year and to decentralisation in 2020.”
Fitch Ratings forecasts that “public debt will increase, reaching a peak in 2022, when the debt-to-GDP ratio will reach 119% due to slower economic growth expectations and limited fiscal consolidation.”
The biggest risks, the agency’s analysts conclude, are “a faster depreciation of the exchange rate than expected, higher deficits and delays in large natural gas exploration projects.” (macauhub)