President says Mozambican economy is recovering

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President says Mozambican economy is recovering

1:34 CAT | 31 Jan 2017

President Filipe Nyusi said on Friday in Maputo that the country’s economy was already recovering from last year’s fall and from external shocks, expressing optimism about 2017 performance.

“Our economy is emerging from the severe shocks that we have faced in recent years, shocks with diverse impacts on the country’s main economic and financial indicators,” Nyusi said during the inauguration of the new headquarters of Banco Comercial e de Investimentos (BCI ), majority-owned by the Portuguese CGD group.

The recovery of the economy, the head of state continued, is reflected in the recovery of the national currency against the US dollar, rising net international reserves and falling inflation.

“Since October, our metical has been more stable and recovering ground after sharp losses over the past year. The exchange rate has dropped from 80 to about 70 meticals to the dollar. These are important gains that it is important to consolidate, because they offer our entrepreneurs a more optimistic outlook,” President Nyusi said.

According to Nyusi, the central bank bought US$275 million from the commercial banks in the last quarter of 2016, further improving its balance and import coverage of non-factor goods and services to above 3.5 months.

The head of state also said that the international audit of the country’s public debt, demanded by the International Monetary Fund (IMF) and donors for the resumption of financial aid, was proceeding at a good pace.

President Nyusi said the sustainability of public expenditure and debt, in a scenario where external aid disbursements were unpredictable, posed a challenge that required major structural reforms in the public and productive sectors.

Last year, the economy suffered its worst growth rate in the last 15 years, at 3.5 percent, after having enjoyed growth of between 5 and 10 percent over the last decade.

The poor gross domestic product figures were due to the combined effect of falling commodity prices on the international market, declining foreign investment performance, galloping inflation and the sharp depreciation of the metical.

Source: Lusa