Mozambique: Government rainy season contingency plan lists 175 roads at risk
FocusEconomics believes Mozambique’s economy is expected to grow 3.3% this year and 3.5% next year, which shows an upward revision of 0.2 points for next year.
FocusEconomics revised the data it presented in July, when it pointed to a contraction of 0.7% in the first quarter, and has now assumed a growth figure of 3.2% in the first quarter and 3.4% in the second quarter of this year.
“Preliminary GDP data reveal that economic activity remained relatively subdued in Q2, albeit slightly stronger than at the outset of the year. Annual growth inched up from 3.2% in Q1 to 3.4% in Q2,” its analysts write, pointing to the mining and agriculture sectors as the major drivers of economic growth, which nevertheless, according to their projection, is still far from the 5.3% growth for this year planned by the government.
The finance minister told Lusa in April on the sidelines of the spring meetings of the International Monetary Fund (IMF) that the official growth forecast would be revised to a value above 3% (the IMF forecast at that time), but 5.3% remains the figure in official documents. In August, the IMF updated its economic growth forecast to between 3.5% and 4%.
According to Focus Economics, the external position “deteriorated in Q2” as the current account deficit “almost doubled from the same period a year earlier due to a widening trade deficit”.
Foreign direct investment also fell, to almost half the previous value, with lower investment in extractive industries in particular.
The data already available, Focus Economics analysts say, “suggests a soft start to Q3 as business confidence weakened in July from Q2, reflecting firms’ more downbeat sentiment over employment conditions ahead”.
The slight acceleration of economic growth from 3.3% this year to 3.5% next year “should be supported by easing of monetary conditions and favourable external demand for coal and aluminium, Mozambique’s key export commodities”, the analysts conclude.
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