Mozambique: VAT re-imposed on sugar, soap and cooking oil
Lusa (File photo) / Maputo
The BMI Research consultancy has said it believes that Mozambique’s donors will not resume aid to the country during the course of this year and that public investment will continue to fall due to a lack of international support.
“The Mozambican government will continue to cut investments in the coming quarters to try to cope with the budgetary pressure arising from the withdrawal of international support,” the analysts of the Fitch rating agency consultancy write.
In BMI’s most recent risk analysis, accessed by Lusa, analysts are convinced that “there is little chance that foreign creditors and donors will return in 2018 and, with the country having elections this year and national elections in 2019, current expenditure is unlikely to be reduced”.
BMI believes that the Mozambican economy has “emerged from the worst of the crisis that followed the revelation of the ‘hidden debt'”, and that “gross domestic product will accelerate due to the fall in inflation”, which will in turn “boost internal demand and contribute to economic activity, which will also benefit from private investment in infrastructure and coal production”.
Growth, however, will not be at the level of the recent past, standing at 4.6 percent this year, up from 4.1 percent last year and 3.8 percent in 2016, but “below the 7 percent trend registered between 2000 and 2015”.
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