IMF forecasts strong recovery of Mozambique’s economy in 2020

14 November 2019

Mozambique’s economy is expected to see a strong recovery in 2020, coupled with a low inflation rate, according to projections from a mission of the International Monetary Fund (IMF), led by Ricardo Veloso, which was in Maputo from 6 to 12 November to assess the main indicators and the evolution of the country.

The statement issued at the end of the mission forecasts that Mozambique’s Gross Domestic Product (GDP) will see real growth of 5.5% in 2020, compared with 2.1% expected for this year.

The forecast is due to post-cyclone reconstruction efforts, a recovery in agriculture and the economic stimulus of further gradual easing of monetary conditions and the settlement of overdue domestic payments to suppliers.

“The construction sector and other activities should also benefit from investments in large liquefied natural gas projects, with inflation expected to remain low, with a slight rise to 5.0% at the end of 2020 from 3.0% at the end of 2019,” it said.

The statement said members of the mission welcomed the continued efforts of the Attorney General’s Office to hold those involved in the issue of hidden debts to account.

Following the Wall Street Journal’s revelation of the hidden debts in 2016, the IMF suspended a financial aid programme to Mozambique, followed by other countries and multilateral organisations that provided direct support to the country’s State Budget.

The IMF has always called for the people involved to be held to account for the controversial loans and for issuing eurobonds of three public companies worth more than US$2 billion, backed by the state but without the parliament’s knowledge.

Then Finance Minister Manuel Chang is under arrest in South Africa, where he waiting for the outcome of two extradition requests, initially presented by the United States and later by Mozambique. (Macauhub)